REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.2530 OF 2012

Birla Institute of Technology        ….Appellant(s)

VERSUS

The State of Jharkhand & Ors.       …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1. This appeal is directed against the final judgment

and order dated 02.04.2008 passed by the High Court

of Jharkhand at Ranchi in LPA No.53 of 2007 whereby

the Division Bench of the High Court dismissed the

LPA filed by the appellant herein and confirmed the

order dated 12.01.2007 passed by the Single Judge of

the High Court in W.P. No.2572 of 2005.  

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2. The controversy involved in this appeal is a short

one as would be clear from the facts stated infra.

3. The appellant is a premier technical educational

institute of repute in the country.  It is known as “Birla

Institute of Technology” (BIT).

4. Respondent No.4 joined the appellant­Institute as

Assistant Professor on 16.09.1971 and superannuated

on 30.11.2001 after attaining the age of

superannuation.

5. Respondent No.4 then made a representation to

the appellant and prayed therein for payment of

gratuity amount which, according to respondent, was

payable to him by the appellant under the Payment of

Gratuity Act,  1972 (for  short called “The Act”).  The

appellant, however, declined to pay the amount of

gratuity as demanded by respondent No.4.   

6. Respondent No.4,  therefore, filed an application

before the controlling authority under the Act against

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the appellant and claimed the amount of gratuity

which, according to him, was payable to him under the

Act.  

7. By order dated 07.09.2002, the controlling

authority (respondent No.3) allowed the application

filed by respondent No.4 and directed the appellant to

pay a sum of Rs.3,38,796/­ along with interest at the

rate  of  10% p.a. towards  the gratuity  to respondent

No.4.

8. The appellant felt aggrieved and filed appeal

before the appellate authority under the Act. By order

dated  15.04.2005, the  appellate  authority  dismissed

the appeal. The appellant felt aggrieved and carried the

matter to the High Court in a writ petition. The High

Court (Single Judge) by order dated 12.01.2007

dismissed the writ petition and upheld the orders of

the  authorities  passed under  the  Act.  The appellant

then filed Letters Patent  Appeal before the  Division

Bench against the order passed by the Single Judge.

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The LPA was also dismissed by the  impugned order

which has given rise to filing of the present appeal by

way of special leave by  the appellant­Institute in this

Court.

9. The short question, which arises for

consideration in this appeal, is  whether the  Courts

below were  justified in holding that respondent No.4

was entitled to claim gratuity amount from the

appellant (employer) under the Act.  

10. Heard Mr. Shambo Nandy, learned counsel for

the appellant and Mr. Anil Kumar Jha, learned

counsel for respondent  Nos.1­3  and  Mr. Sunil  Roy,

learned counsel for respondent No.4.  

11. Having heard the learned counsel for the parties

and on perusal of the record of the case, we find merit

in this appeal.

12. As rightly argued by the learned counsel for the

appellant, the issue involved in this appeal remains no

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longer  res integra  and is decided by this Court in

Ahmadabad Pvt. Primary Teachers Association  vs.

Administrative Officer and Others (2004) 1 SCC 755

in favour of the appellant.

13. The question arose for consideration in the case

of  Ahmadabad  Pvt. Primary  Teachers  Association

(supra) as to whether “Teacher” could be regarded as

an “employee” under Section 2(e) of the Act and, if  so,

whether he/she  is  entitled to claim gratuity amount

from his employer in accordance with the provisions of

the Act.  

14. The two­Judge Bench examined this question in

detail.  Justice  D.M. Dharmadhikari  speaking  for the

Bench held that a teacher is not an employee within

the meaning of the expression "employee" as defined

under Section 2(e) of the Act and hence he/she is not

entitled to claim any gratuity amount from his

employer under the Act.   In other words, it was held

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that since a teacher is not an employee under Section

2(e) of the Act, he has no right to invoke the provisions

of the  Act for claiming  gratuity  under the  Act from

his/her employer.

15. It is apposite to quote the reasoning of Their

Lordships  in paras 20 to 26 of the  judgment which

reads as under:   

“20. An educational institution, therefore, is an “establishment” notified under Section 1(3)(c) of the Payment of Gratuity Act, 1972. On behalf of the Municipal Corporation, it is contended that the only beneficial effect of  the notification  issued under Section  1(3)(c) of the  Act of 1972, is that such non­teaching staff of educational institutions as answer the description of any of the employments contained in the definition clause 2(e), would be covered by the provisions of the  Act.  The teaching staff being  not covered by the definition of “employee” can get no advantage merely because by notification “educational institutions” as establishments are covered by the provisions of the Act.

21. Having thus compared the various definition clauses of the word “employee” in different enactments, with  due regard to the  different  aims

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and objects of the various labour legislations, we are of the view that even on plain construction of the words and  expression  used in the  definition clause 2(e)  of  the Act,  “teachers” who are mainly employed for imparting education are not intended to be covered for extending gratuity benefits under the Act. Teachers do not answer description of being employees who are “skilled”, “semi­skilled” or “unskilled”. These three words used in association with each other intend to convey that a person who is “unskilled” is one who is not “skilled” and a person who is “semi­ skilled” may be one who falls between the two categories, meaning he is neither fully skilled nor unskilled. The Black’s Law Dictionary defines these three words as under:

“Semi­skilled work.—Work that may require some alertness and close attention, such as inspecting items or machinery for irregularities, or guarding property or people against loss or injury. Skilled work.—Work requiring the worker to use judgment, deal with the public, analyze facts and figures, or work with abstract ideas at a high level of complexity. Unskilled work.—Work requiring little or no judgment, and involving simple tasks that can be learned quickly on the job.”

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22.  In construing the abovementioned three words which are used in association with each other, the rule of construction noscitur  a  sociis  may be applied. The meaning of each of these words is to be understood by the company it keeps. It is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate  connection with them.  The actual order of these three  words in juxtaposition indicates that meaning of one takes colour from the other. The rule is explained differently: “that  meaning of doubtful words may be ascertained by reference to the meaning of words associated with it”. [See Principles of Statutory Interpretation by Justice G.P. Singh, 8th Edn., Syn. 8, at p. 379.]

23. The word “unskilled” is opposite of the word “skilled” and the word “semi­ skilled” seems to describe a person who falls between the two categories i.e. he is not fully skilled and also is not completely unskilled but has some amount of skill for the work for which he is employed.  The  word “unskilled” cannot, therefore, be understood dissociated from the word “skilled” and “semi­skilled”  to read and construe  it to include in it all categories of employees irrespective of the nature of employment. If the legislature intended to cover all categories of employees for extending benefit of gratuity under the Act, specific  mention  of categories of employment in the definition clause

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was not necessary at all. Any construction of definition clause which renders it superfluous or otiose has to be avoided.

24. The contention advanced that teachers should be treated as included in the expression “unskilled” or “skilled” cannot, therefore, be accepted. The teachers might have been imparted training for teaching or there may be cases where teachers who are employed in primary schools are untrained. A trained teacher is not described in the industrial field or service jurisprudence as a “skilled employee”. Such adjective generally is used for an employee doing manual or technical work. Similarly, the words “semi­skilled”  and  “unskilled”  are  not understood in educational establishments as describing nature of job  of untrained teachers.  We  do  not attach much importance to the arguments advanced on the question as to whether “skilled”, “semi­skilled” and “unskilled” qualify the words “manual”, “supervisory”, “technical” or “clerical” or the above words qualify the word “work”. Even if all the words are read disjunctively  or in  any  other  manner, trained or untrained teachers do not plainly answer any of the descriptions of the nature  of  various employments given in the definition clause. Trained or untrained teachers are not “skilled”, “semi­skilled”, “unskilled”, “manual”, “supervisory”, “technical” or “clerical” employees. They are also not employed

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in “managerial” or “administrative” capacity. Occasionally, even if they do some administrative work as part of their duty with teaching, since their main  job  is imparting education, they cannot be held employed in “managerial” or “administrative” capacity.  The teachers are  clearly not intended to be covered by the definition of “employee”.

25. The legislature was alive to various kinds of definitions of the word “employee” contained in various previous labour enactments  when the Act was passed in 1972. If it intended to cover in the definition of “employee” all kinds of employees, it could have as well used such wide language as is contained in Section 2(f) of the Employees’ Provident Funds Act, 1952 which defines “employee” to mean “any person  who is employed for  wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment …”. Non­use of such wide language in the definition of “employee” in Section 2(e) of the Act of 1972 reinforces our conclusion that teachers are clearly not covered in the definition.

26. Our conclusion should not be misunderstood that teachers although engaged  in  a  very  noble  profession of educating our young generation should not be given any gratuity benefit. There are  already in several  States separate statutes, rules and regulations granting

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gratuity benefits to teachers in educational institutions which are more or less beneficial than the gratuity benefits  provided  under the  Act. It is for the legislature to take cognizance of situation of such teachers in various establishments where gratuity benefits are not available and think of a separate legislation for them in this regard. That is the subject­matter solely of the legislature to consider and decide.”                 (emphasis supplied)

16. Reading the aforementioned principle of law laid

down by this Court, we have no hesitation in holding

that respondent  No.4,  who  was also a teacher and

worked with the appellant as such, was not eligible to

claim gratuity amount from the appellant (BIT) under

the Act.

17. In our opinion, the High Court though took note

of the  decision  rendered in the  case  of  Ahmadabad

Pvt. Primary Teachers Association (supra) but erred

in distinguishing it on the ground that it is applicable

only to the primary teachers working in primary

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schools and since the case at hand is not a case of a

primary teacher, it has no application to this case.  

18. In our view, the High Court failed to read last line

of Para 24 quoted above wherein this Court has held

in clear terms that “teachers” are clearly not intended

to be covered by the definition of “employee”.  The High

Court was, therefore, not justified in making a

distinction between the “teachers working in the

primary schools” and the “teachers working in other

educational institutions”.  

19. In other words, the High Court failed to see that

this Court had examined the expression “teacher” qua

the expression “employee” defined in Section 2(e) of the

Act and then held that “teacher” is not an employee

within the meaning of  Section 2(e)  of  the Act.  While

laying  down the law, this  Court did  not  make any

distinction between the teachers inter se and nor made

any distinction as to in which type of educational

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institute the teacher is  working for  determining  his

entitlement to claim the gratuity under the Act.    

20. We cannot, therefore, concur with the view taken

by the High Court, which in our view, is not in

conformity with the law laid down by this Court in the

case of  Ahmadabad Pvt. Primary Teachers

Association (supra). It is based on incorrect reading of

this Court’s decision and, therefore, it deserves to be

set aside.

21. We, however, make it clear that we have

examined  the  case  at  hand only in the light  of the

provisions of the Act, which were akin to the facts of

the case in  Ahmadabad Pvt. Primary Teachers

Association (supra).

22.  In case there is any other State Act or Scheme in

force, which extends any benefit to the employees of

the Institute only then respondent No.4 would be at

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liberty to take benefit of such Act/Scheme in

accordance with law.

23. As a result, the appeal succeeds and is

accordingly allowed. The impugned order is set aside.

As a consequence, the application made by respondent

No.4 before the controlling authority  under the  Act

against the appellant is dismissed as not

maintainable.   

                    ………...................................J.         [ABHAY MANOHAR SAPRE]

   …...……..................................J.                           [INDU MALHOTRA]

New Delhi; January 07, 2019  

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