REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.1254 OF 2018

Netram Sahu        ….Appellant(s)

VERSUS

State of Chhattisgarh & Anr.          …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  01.08.2014  passed  by

the High Court of Chhattisgarh at Bilaspur in Writ

Appeal No.240 of 2014 whereby the Division Bench

of the High Court dismissed the appeal filed by the

appellant  herein  and  affirmed  the  judgment  and

order dated 16.12.2013 passed by the Single Judge

of the High Court in Writ Petition(L) No.178 of 2013

by  which  the  Single  Judge  allowed  the  petition

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preferred by the respondents herein and set aside

the  orders  of  the  Controlling  Authority  and

Appellate  Authority  by  which  the   claim  of  the

appellant  herein  of  gratuity  for  the  period  from

01.04.1986 to 23.05.2008 was allowed.  

2. Few relevant facts need mention to appreciate

the short controversy involved in the appeal.

3. The appellant was appointed as daily wager on

01.04.1986 by the Water Resources Department of

the State of Chhattisgarh and was attached to the

office  of  SDO  (E/M)  Light  Machinery  Tubewell  &

Gage  Sub-Division  Sakri,  P.S.  Charkarbhata,

District Baster (CG).  Subsequently, the services of

the  appellant  were  regularized  on  work  charge

establishment  to  the  post  of  Pump  Operator  by

order dated 06.05.2008. After attaining the age of

superannuation,  the  appellant  retired  on

30.07.2011.

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4. The  appellant  was,  however,  not  paid  the

gratuity  amount  by the State  which,  according to

him,  was  payable  to  him  after  his  retirement.

Therefore, the appellant filed an application before

the  Controlling  Authority  under  the  Payment  of

Gratuity Act,  1972 (hereinafter referred to as “the

Act”) and prayed for payment of gratuity amount to

him in accordance with the provisions of the Act.

5. By  order  dated  27.03.2012,  the  Controlling

Authority allowed the application and held that the

appellant is entitled to claim gratuity amount from

the State for the services rendered by him. It was

further held that the appellant has in all rendered

25 years and 3 months of service (22 years and 1

month as daily wager and 3 years and 2 months as

regular work charge employee) and hence rendered

the  required  years  of  qualified  service  as  per  the

requirements of the Act.

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6.  The State felt aggrieved and filed appeal before

the specified Appellate Authority under the Act. By

order  dated  30.01.2013,  the  Appellate  Court

dismissed the appeal filed by the State and affirmed

the order of the Controlling Authority.  

7. The State  pursued the  matter  and filed Writ

Petition No.178/2013 against the order passed by

the  Appellate  Authority  in  the  High  Court  of

Chhattisgarh at Bilaspur. The Single Judge  of the

High Court, by order dated 16.12.2013 allowed the

writ  petition  and  set  aside  the  orders  of  the

Controlling Authority and the Appellate Authority.  

8. The appellant herein (employee) felt aggrieved

by  the  order  of  the  Single  Judge  and  filed  writ

appeal  before  the  Division  Bench.  By  impugned

judgment,  the  Division  Bench  dismissed  the

appellant's appeal and upheld the order passed by

the Single Judge, which has given rise to filing of

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the appeal by way of special leave by the employee

concerned in this Court.

9. The  short  question,  which  arises  for

consideration  in this  appeal,  is  whether  the  High

Court (Single Judge/Division Bench) was justified in

holding  that  the  appellant  (employee)  was  not

entitled to claim gratuity from the State (respondent

herein) for the services rendered by him or in other

words,  the  question  arises  for  consideration  is

whether the appellant can be held to have rendered

qualified  service,  i.e.,  continuous  service  as

specified in Section 2(e) read with Section 2A of the

Act so as to make him eligible to claim gratuity, as

provided under the Act, from the State.

10. Heard  Mr.  Kiran  Kumar  Jaipuriar,  learned

counsel  for  the  appellant  and  Mr.  Aniruddha  P.

Mayee, learned counsel for the respondents.

11. Having  heard  the  learned  counsel  for  the

parties and on perusal of the record of the case, we

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are inclined to allow the appeal and while setting

aside the orders of the High Court (Single Judge and

Division Bench) restore the orders of the Controlling

Authority and Appellate Authority.

12.   It  is  not  in dispute that  the appellant  has

actually rendered the total service for a period of 25

years 3 months, i.e., from 01.04.1986 to 30.07.2011

to  the  State.  It  is  also  not  in  dispute  that  the

appellant's services were regularized by the State by

order  dated  06.05.2008,  i.e.,  much  prior  to  the

appellant attained the age of superannuation. It is

also not in dispute that the appellant's 25 years and

3 months period of service satisfied the rigor of the

expression  "continuous  service"  as  defined  under

Section 2-A of the Act.

13. The submission of the learned counsel for the

respondent-State was that the appellant could not

be  held  eligible  to  claim  the  gratuity  amount

because out of  the total  period of  25 years of  his

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service, he worked 22 years as daily wager and only

3 years as regular employee. It is for this reason,

the learned counsel urged that the appellant could

not be said to have worked continuously for a period

of 5 years as provided under the Act so as to make

him eligible to claim gratuity.       

14.   We  do  not  agree  with  this  submission  of

learned counsel  for the respondent-State for  more

than one reason. First,  the appellant has actually

rendered  the  service  for  a  period  of  25  years;

Second, the State actually regularized his services

by  passing  the  order  dated  06.05.2008;  Third,

having  regularized  the  services,  the  appellant

became entitled to claim its benefit for counting the

period of  22 years regardless of  the post and the

capacity on which he worked for 22 years; Fourth,

no  provision  under  the  Act  was  brought  to  our

notice which disentitled the appellant from claiming

the gratuity and nor any provision was brought to

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our notice which prohibits the appellant from taking

benefit  of  his  long  and  continuous  period  of  22

years  of  service,  which  he  rendered  prior  to  his

regularization for calculating his continuous service

of five years.

15. In  our  considered  opinion,  the  High  Court

committed  an  error  in  placing  reliance  on  the

decision  of  this  Court  in  Secretary,  State  of

Karnataka & Ors. vs. Umadevi(3) & Ors., (2006) 4

SCC 1 to deny the relief of grant of gratuity to the

appellant.   In  the  case  at  hand,  the  High  Court

should have seen that the services of the appellant

was actually regularized by the State and, therefore,

the law laid down in  Umadevi(supra)  could not be

relied  on.   Indeed,  even the  decision  of  Umadevi

(supra) makes a distinction in cases and where the

services stand regularized, the ratio of  Umadevi to

deny the relief would not apply.   

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16. In  our  considered  opinion,  once  the  State

regularized  the  services  of  the  appellant  while  he

was in State services, the appellant became entitled

to count his total period of service for claiming the

gratuity amount subject to his proving continuous

service of 5 years as specified under Section 2A of

the Act which, in this case, the appellant has duly

proved.  

17. In the circumstances appearing in the case, it

would be the travesty of justice, if the appellant is

denied  his  legitimate  claim  of  gratuity  despite

rendering  “continuous  service”  for  a  period  of  25

years  which  even,  according  to  the  State,  were

regularized.   The  question  as  to  from which  date

such  services  were  regularized  was  of  no

significance for calculating the total length of service

for claiming gratuity amount once the services were

regularized by the State.

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18. It was indeed the State who took 22 years to

regularize the service of the appellant and went on

taking  work  from the  appellant  on  payment  of  a

meager salary of Rs.2776/- per month for 22 long

years  uninterruptedly  and  only  in  the  last  three

years,  the  State  started  paying  a  salary  of

Rs.11,107/-  per  month  to  the  appellant.   Having

regularized the services of the appellant, the State

had  no  justifiable  reason  to  deny  the  benefit  of

gratuity  to  the  appellant  which  was  his  statutory

right under the Act.  It being a welfare legislation

meant for the benefit of the employees, who serve

their employer for a long time, it is the duty of the

State to voluntarily pay the gratuity amount to the

appellant  rather  than  to  force  the  employee  to

approach the Court to get his genuine claim.   

19. In view of the foregoing discussion, we cannot

agree with the reasoning and the conclusion arrived

at by the High Court which is legally unsustainable.

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It is really unfortunate that the genuine claim of the

appellant  was being  denied by  the  State  at  every

stage  of  the  proceedings  up  to  this  Court  and

dragged him in fruitless litigation for all these years.

20.  Indeed, this reminds us of the apt observations

made by the Chief Justice M.C. Chagla (as he then

was) in the case of Firm Kaluram Sitaram vs. The

Dominion  of  India (AIR  1954  Bombay  50).  The

learned  Chief  Justice  in  his  distinctive  style  of

writing  while  deciding  the  case  between  an

individual citizen and the State made the following

pertinent observations:  

“Now,  we  have  often  had  occasion  to say  that  when  the  State  deals  with  a citizen  it  should  not  ordinarily  reply  on technicalities, and if the State is satisfied that the case of the citizen is a just one, even though legal defences may be open to it,  it  must  act,  as  has  been  said  by eminent Judges, as an honest person.”  

21. These observations apply in full force against

the  State  in  this  case  because  just  case  of  the

appellant  was  being  opposed  by  the  State  on

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technical  grounds.  As  a  consequence,  the  appeal

succeeds and is allowed. Impugned judgment/order

passed  by  the  High  Court  (Single  Judge  and

Division Bench) are set aside and the orders of the

Controlling  Authority  and  Appellate  Authority  are

restored with cost of  Rs.25,000/-  payable by the

State to the appellant. Cost to be paid by the State

along with the payment of gratuity amount.     

22. The  respondent-State  is  directed  to

release/pay the gratuity amount as determined by

the Controlling Authority within three months to the

appellant.      

                  ………...................................J.   [R. K. AGRAWAL]

                                    …...……..................................J.

        [ABHAY MANOHAR SAPRE]

New Delhi; March 23, 2018  

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