REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.3150  OF 2019

(Arising out of SLP (Civil) 7627  of 2019)

Diary No. 41829 of 2018

Sr. Superintendent of Post Offices   …Appellant

Versus

Gursewak Singh & Ors.                              …Respondents

WITH

CIVIL APPEAL NO. 3151   OF 2019 (Arising out of SLP (Civil)No. 7628  of 2019)

Diary No. 41825 of 2018

Sr. Superintendent of Post Offices   …Appellant

Versus

Smt. Swam Kanta                                          …Respondents

J U D G M E N T

INDU MALHOTRA, J.

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1. Leave granted in both the special leave petitions.

2. A common question of law arises in both the appeals which are

being disposed of  by  a  common  judgment.  The  facts in  Sr.

Superintendent of Post Offices  v.  Gursewak Singh & Ors.  are

being considered as the lead case.

3. The present Civil Appeal has been filed against the Order dated

01.12.2017 passed by a Division Bench of the Punjab &

Haryana High Court at Chandigarh in LPA No. 1612 of 2017.  

4. The factual matrix of the case, briefly stated, is as under:  

4.1. On 26.06.1991, Respondent No. 1 was engaged as a

Gramin  Dak Sewak  i.e.  an  Extra­Departmental  Agent, to

work on a part­time basis in the Postal  Department at

Faridkot, Punjab.  

4.2. In 2014, Respondent No. 1 voluntarily resigned from

the said part­time job.  On 28.08.2014, the  Department

accepted the resignation, and Respondent No. 1 was

discharged with immediate effect.

4.3. Respondent No. 1 approached the Controlling

Authority­cum­Assistant Labour Commissioner, Central

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Jalandhar, seeking gratuity under the Payment of Gratuity

Act, 1972 (herein after referred to as “the 1972 Act”).

4.4. The Appellant – Department took the stand that

Respondent  No. 1  was not entitled to  ex­gratia  gratuity

under the  Gramin  Dak  Sewak  (Conduct  &  Engagement)

Rules, 2011 as he had voluntarily resigned from the job.

The Controlling Authority­cum­Assistant Labour

Commissioner, Central Jalandhar,  vide  Order dated

21.09.2015,  allowed the claim of  Respondent  No.  1  and

directed the Department to pay an amount of Rs.

1,06,021/­ along with Interest @ 10% p.a. from

28.08.2014.

4.5. The Department filed an Appeal u/S. 7(7) of the 1972

Act, against the Order dated 21.09.2015 before the Deputy

Chief Labour Commissioner (Central) Kendriya Sadan,

Chandigarh.

The Appellate Authority  vide  Order dated 17.05.2016

dismissed the Appeal filed by the Appellant – Department,

and upheld the  Order dated 21.09.2015 passed by the

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Controlling Authority­cum­Assistant Labour Commissioner,

Central Jalandhar.

4.6. The Department filed C.W.P. No. 11412 of 2017 before

the  Punjab & Haryana High Court  at  Chandigarh under

Article 226/227 of the Constitution against the Order dated

17.05.2016.

The learned Single Judge vide Oder dated 23.05.2017

dismissed the Writ Petition filed by the Department relying

upon earlier judgments passed by the same High Court in

Senior Superintendent of Post Officers, Jalandhar Division,

Jalandhar  v.  Darshan Ram (through LRs) & Ors.1  and

Senior Superintendent of Post Officers v. Smt. Sham Duiari &

Ors.2

4.7. The Department challenged the Order dated

23.05.2017 passed by the Single Judge by way of LPA No.

1612 of 2017 before the Punjab & Haryana High Court at

Chandigarh.

The division bench of the Punjab  &  Haryana  High

Court at  Chandigarh  on  01.12.2017,  dismissed the LPA

1 2014 (9) SCT 120 (DB) 2 2006 (3) SCT 577

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filed by the  Department on the ground that SLPs filed

against the earlier judgments had been dismissed by this

Court. As a consequence, the judgment of the learned

Single Judge did not warrant interference.

4.8. The Department has filed the present Appeal to

challenge the Judgment and Order dated 01.12.2017

passed by a division bench of the High Court.

5. We have heard the learned ASG Mr. Vikramjit Banerjee for the

Appellant –  Department.  Mr. Bharat Sangal, Advocate was

appointed as  Amicus Curiae vide  Order dt. 10.12.2018 to

represent the interest of the Respondents who did not appear,

despite service being effected on them.  

We  have  perused the  pleadings  and  written  submissions

filed by both parties.  

6. The issues which arise for consideration are as follows:  

6.1. Whether a Gramin Dak Sewak  is an ‘employee’ as per

Section 2(e) of the 1972 Act, and is entitled to payment of

Gratuity under this Act?

6.2. Whether a Gramin Dak Sewak is eligible for payment of

Gratuity under the 2011 Rules upon voluntary resignation?

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7. The learned ASG appearing on behalf of the Department

submitted that :

7.1. The  Gramin Dak Sewaks  constitute a unique

department of posts. The persons working as  Gramin Dak

Sewaks are not regular departmental employees but “extra­

departmental agents”, who work on a part­time basis for a

few hours every day; and, have an independent source of

livelihood. They are permitted to work upto the age of 65

years.

7.2. The  Gramin  Dak  Sewaks  are governed  by the  2011

Rules, which form a complete and separate code providing

for the recruitment, gratuity, conduct, and disciplinary

proceedings of Gramin Dak Sewaks.

The terms and conditions of their engagement are

governed by Rule 3­A of the 2011 Rules, which reads as

under :

“3­A Terms and Conditions of Engagement  

(i) A Sevak shall not be required to perform duty beyond a maximum Period of 5 hours in a day;  

(ii) A Sevak shall not be retained beyond 65 years of age;  

(iii)A Sevak shall have to give an undertaking that he has other sources of

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income besides the allowances paid or to be paid by the Government for adequate means  of livelihood for himself  and  his family;  

(iv)A Sevak can be transferred from one post/unit to another post/unit in public interest;  

(v) A Sevak shall be outside the Civil Service of the Union;  

(vi)A Sevak shall not claim to be at par with the Central Government employees;  

(vii) Residence in post village/delivery jurisdiction of the Post Office within one month after selection but before engagement shall be mandatory for a Sevak:; Failure to reside in place of duty for GDS

BPM & within delivery jurisdiction of the Post Office for other categories of Gramin Dak Sevaks after engagement shall be treated as violative of conditions of engagement and liable for disciplinary action under Rule 10 of the Conduct rules, requiring removal/dismissal;

(viii) Post Office shall be located in the accommodation to be provided by Gramin Dak Sevak Branch Postmaster suitable for use as Post Office premises;  

(ix)Combination of duties of a Sevak shall be permissible;”

(emphasis supplied)

A reading of Rule 3­A(iii) of the 2011 Rules, makes it

abundantly clear that a Gramin Dak Sewaks must have an

independent means of livelihood. The Gramin Dak Sewaks

are engaged on a part­time basis for a maximum of 3 to 5

hours a day. Rule 3­A(v) and (vi) stipulate that a  Gramin

Dak Sewak shall be outside the Civil Service of the Union,

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and shall not claim to be at par with the servants of the

Government.  

7.3. It was further submitted on behalf of the Appellant –

Department that the part­time employment of Gramin Dak

Sewaks  is governed by a separate scheme, since they do

not form part of the regular cadre, and cannot be treated to

be in the  main service or class of service. Gratuity is

payable to them in accordance with the Gramin Dak Sewak

(Conduct & Engagement) Rules, 2011.  

Rule 6(1) of the 2011 Rules provides for payment of ex­

gratia  gratuity to  Gramin Dak Sewaks.  Rule  6(13)  of the

2011 Rules provides that no gratuity is payable to a Gramin

Dak  Sewak,  if he resigns from the agency on  his own,

except on medical grounds.  

Rule 6(1) and (13) of the 2011 Rules read as under :

“(1) Payment of ex­gratia gratuity. –  The question of grant of some kind of purely ex gratia monetary grant to ED Agents working in the Indian Posts and Telegraphs Department on termination of their services has been under consideration for a long time. It has been decided as follows :­ 1. ED Agents as defined in P & T Extra

Departmental Agents (Conduct and Service) Rules, 1964,  whose services  are terminated otherwise than (i) for unsatisfactory word or (ii) as a measure of disciplinary action or  (iii) in

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consequence of their being appointed in a regular post under the P & T Department, may be sanctioned monetary grants termed as ‘Gratuity’, provided that they have put in not less than ten years of continuous satisfactory service as Ed Agents.”

“(13) No gratuity to ED Agent who quits the agency on his own. – The question of extending the  benefit of  grant  of  ex  gratia  gratuity to  ED Agents who have to resign on account of circumstances beyond their control was taken up with the Ministry of finance. It has been decided that no ex gratia gratuity  will be paid to ED Agents in such cases. It is, therefore, clarified that according to the present orders, gratuity is payable only if the services of an ED Agent are terminated in consequence of an action of the department, subject to their fulfillment of the other prescribed conditions and that  no gratuity is payable if an ED Agent quits the agency on his own. The services of an ED Agent should not be terminated when he himself quits the job. In such cases, an order permitting the ED Agent to quit the services on his own should be issued so that the order may not be construed as an order of termination of service. ”

(emphasis supplied)

8. Mr.  Bharat  Sangal, learned  Amicus  Curiae, represented the

interest of the  Respondents  before this  Court. The learned

Counsel inter alia submitted that :

8.1. The  Payment  of  Gratuity  Act,  1972 applies to  every

place defined as an ‘establishment’ within the meaning of

any law for the time being in force in a state.

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To determine the applicability of the Payment of

Gratuity Act,  1972  it  must be seen whether the place  is

defined as an establishment under the law applicable to the

State.  Reliance  was  placed on the judgment of  State of

Punjab v. Labour Court Jalandhar3 wherein this Court held

that an establishment falling within the definition of

Section 2(ii)(g) of the Payment of Wages Act, 1936 would be

covered by the Payment of Gratuity Act, 1972.

It  was contended that the Postal  Department is an

establishment within the  meaning of the term used in

Section 2(ii)(g) of the Payment of Wages Act, 1936 and the

1972 Act, would be applicable to its employees.

8.2. Section 1(3) of the 1972 Act, provides for payment of

gratuity to employees of every factory, mine, oilfield,

plantation, port, railway company, shop or establishment.

Section 1(3) of the 1972 Act reads as under :

“1.Short title, extent, application and commencement.­ (3) It shall apply to­ (a) every factory,  mine,  oilfield,  plantation,  port and railway company; (b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State,

3 (1980) 1 SCC 4

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in which  ten or more persons are employed, or were employed, on any day of the preceding twelve months; (c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.”  

(emphasis supplied)

8.3. It was further submitted that Section 14 of the 1972

Act, specifically provides that the Act would apply

“notwithstanding anything inconsistent therewith contained

in any other enactment”.  

Section 14 of the 1972 Act reads as under :  

“14. Act to override other enactments, etc.— The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.”

8.4. Section 4(1)(b) of the 1972 Act provides that gratuity

would be payable to an employee even on his resignation.

Thus, any rule barring payment of gratuity to an employee

who  resigns,  would  be  contrary to  Section  14 read  with

Section 4(1)(b) of the 1972 Act.

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8.5. It was further submitted that the Department of Posts,

Gramin Dak Sewak (Conduct and Employment) Rules, 2001

were superseded and replaced by the Department of Posts,

Gramin Dak Sewak  (Conduct and Engagement) Rules,

2011.

Under the amended 2011  Rules the term

“employment/appointment” has been replaced by

“engagement”. The amended Rule 6 pertains to payment of

ex gratia Gratuity to Gramin Dak Sewaks.

9. The first issue to  be  determined is  whether  a  Gramin  Dak

Sewak is an ‘employee’ as per Section 2(e) of the 1972 Act, and

is entitled to payment of Gratuity under this Act?

9.1. Section 1(3)(b) of the 1972 Act applies to every

‘establishment’ within the meaning of “any law” for the time

being in force.  

This Court in  State of Punjab  v.  Labour Court

Jalandhar4 has held that there is no reason for limiting the

meaning  of the  expression ‘law’ in  Section 1(3)(b) of the

1972 Act.  

4 (1980) 1 SCC 4

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The Postal Department is as an establishment under

Section 2(k) of the Indian Post Office Act, 1898 which reads

as under :

“2. Definitions.­ (k) the expression  “Post Office” means the department, established  for the purposes of carrying the provisions of this Act into effect and presided over by the Director General.”

(emphasis supplied)

The Indian Post Office Act, 1898 would fall under the

expression ‘law’ in Section 1(3)(b). Consequently, the Post &

Telegraphs Department would be an establishment under

the 1972Act.

9.2. Section 4(1) of the 1972 Act, provides for payment of

Gratuity to an employee on the termination of his

employment,  subject to  the  condition that  he  must have

rendered a minimum of 5 years’ continuous service.  

Section 4(1) of the 1972 Act reads as under :

“4. Payment of Gratuity.­  (1) Gratuity shall be payable to an employee on the  termination of  his employment after  he has rendered continuous service for not less than five years,­ (a) on his superannuation, or (b) on his retirement or resignation, (c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years  shall  not  be  necessary where  the

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termination of the employment of any employee is due to death or disablement: Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to  his  heirs,  and where  any  such  nominees  or heirs is minor, the share of such minor, shall be deposited with the Controlling Authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority. Explanation.­ For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.”

(emphasis supplied)

9.3. Section 4 of the 1972 Act, states that “Gratuity shall be

payable to an employee”.  

The term ‘employee’  is defined by Section 2(e) of  the

1972 Act, as under :

“2. Definitions.­ In this Act, unless the context otherwise requires,­ (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;”

(emphasis supplied)

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Section 2(e) of the 1972 Act, however specifically

excludes persons who are governed by any Act,  or Rules

providing for payment of Gratuity.  

9.4. Section 2(e) of the 1972 Act excludes persons who hold

a post with the Central or State Government and are

governed by any other Act or rules providing for payment of

gratuity.

Gramin Dak Sewaks  are engaged as Extra

Departmental Agents, a post governed by the 2011 Rules.5

These Rules have a separate provision for payment of

Gratuity to the Extra Departmental Agents.  

A  Gramin Dak Sewak  is not an “employee” under the

1972 Act.  The first issue is answered accordingly.  

10. The second issue is whether a Gramin Dak Sewak is eligible

for payment of Gratuity upon voluntary resignation under the

2011 Rules?

10.1. The 2011 Rules provide that  Gramin Dak Sewaks  are

Extra­Departmental Agents, who are outside the Civil

Service of the Union, and shall not claim to be at par with

5 Superintendent of Post Officers  v. PK Rajamma; (1997) 3 SCC 94    See also Union of India v. Kameshwar Prasad; (1997) 11 SCC 650

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the Central Government Employees. The Extra­

Departmental  Agents are engaged  by the  Department of

Posts & Telegraphs to cater to the postal requirements in

the rural and remote areas. The system avails the services

of schoolmasters, shopkeepers, landlords, and such other

persons in  a village  who  have  a reasonable standard  of

literacy, and adequate means of livelihood, and can

therefore  assist the  Department  on  a  part­time  basis  by

way  of gainful  avocation, to  provide service to the rural

communities for their postal requirements.

Rule 3­A(i) of the 2011 Rules provides that the Gramin

Dak Sewaks shall not be required to perform duties beyond

a  maximum period of 5 hours a day. This shows the

avocational nature of the service.  

Rule 6(1) of  the 2011 Rules provides for payment of

gratuity to Gramin Dak Sewaks. However, Rule 6(13) states

that no Gratuity is payable if an Extra­Departmental Agent

quits the agency on his own.  

10.2. In  the  present  case,  Respondent  No.  1 tendered his

resignation in 2014. The Appellant – Department accepted

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his resignation  vide  letter dated 28.08.2014. The  Order

dated 28.08.2014 accepting the resignation of Respondent

No. 1 reads as under :

“ The  unconditional resignation dated nil submitted by Sh. Gursewak Singh from the post of GDSBPM Assa Butter in a/c with Bariwala SO is hereby accepted with immediate effect. Usual charge Reports should be sent to all concerned.

Sd/­ THE SUPDT OF POST OFFICES  

FARIDKOT DIVISION FARIDKOT – 151203 ”  

(emphasis supplied)

The  Order  was  passed  under  Rule 6(13) permitting

Respondent No. 1 to quit the services of the  Gramin Dak

Sewak as per his voluntary resignation.

As a consequence of his resignation, Respondent No. 1

became disentitled from the payment of Gratuity under the

statutory  2011 Rules  applicable to  Gramin  Dak Sewaks.

The second issue is answered accordingly.

11. The Impugned Orders passed by the High Court in both the

Appeals are hereby set­aside.  

We  acknowledge the valuable  assistance  provided  by the

learned Amicus Curiae Mr. Bharat Sangal in representing the

interest of the Respondents.

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Pending applications in both the Appeals, if any, are

dismissed.

The Appeals are allowed accordingly.

…...........................J. (UDAY UMESH LALIT)

…..……………………J. (INDU MALHOTRA)

New Delhi,

March 15, 2019.

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