NO APPEAL AGAINST ORDER OF CONTROLLING AUTHORITY ON CONDONATION OF DELAY UNDER PAYMENT OF GRATUITY ACT,1972

Kerala High Court Indian Kanoon - http://indiankanoon.org/doc/1753195/ Kerala High Court Malabar Spinning And Weaving Mill vs Narayanan Nair on 27 October, 1988 Equivalent citations: 1989 (58) FLR 434, (1994) IIILLJ 323 Ker Author: Paripoornan Bench: Paripoornan JUDGMENT Paripoornan, J. 1. A common question is posed for consideration in both these Original Petitions. The petitioner is the same in both the cases. It is a Government of Kerala company incorporated under the Companies Act. The first respondent, in both these O.Ps. filed an applications before the second respondent, under the Payment of Gratuity Act, for payment of balance amounts due. The petitioner management contested the claim. Amongst others, it was contended that the second respondent has no jurisdiction to entertain the applications in question and that no sufficient cause was shown by the first respondent to condone the delay in filing the applications. By Ext. P-3, in both the cases, the second respondent-Controlling Authority under the Payment of Gratuity Act found that it has got jurisdiction to hear the applications. It also held that there was sufficient and reasonable cause for condoning the delay in filing the applications. The matter was posted for further evidence. The petitioner filed appeals before the third respondent-Appellate Authority under the Payment of Gratuity Act, and assailed Ext. P-3 order. The third respondent, by Ext. P-5 order in both the cases, dated 25-6-1988, held that the appeal filed against the preliminary order of the Controlling Authority is not maintainable. It was further held that an appeal will lie only against the final order of the Controlling Authority and since the Controlling Authority has not passed its final order, the appeals filed before it are incompetent. The appeals were dismissed in limine. In these Original petitions, the challenge is against Exts. P-5 and P-5 orders. 2. I heard counsel for the petitioner. The only point pressed, at the time of hearing, was that the third respondent erred in holding that the appeals filed before it are unsustainable or incompetent. It was argued that Section 7(7) of the Payment of Gratuity Act was misunderstood in holding that the appeals are incompetent. 3. Section 7(4) and Section 7(7) of the Payment of Gratuity Act, 1972 are relevant for deciding the point in controversy. The said sections provide as follows: "7(4)(a) : If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity. (b) Where there is a dispute with regard to any matter or matters specified in Clause (a), the employer or employee or any other person raising the dispute may make an application to the controlling" authority for deciding the dispute. (c) The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer. (d) The controlling authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto. (e) As soon as may be after a deposit is made under Clause (a) the controlling authority shall pay the amount of the deposit- (i) to the applicant where he is the employee; or (ii) where the applicant is not the employee, to the nominee or as the case may be, the guardian of such nominee or heir of the employee if the controlling authority is satisfied that there is no dispute as to the right of the applicant to receive the amount of gratuity. (7) Any person aggrieved by an order under Sub-section (4), may, within sixty days from the date of receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf: Provided that the appropriate Government or the appellate authority, as the case may be, may if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period of sixty days: Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under Sub-section (4), or deposits with the appellate authority such amount". 4. The third respondent-Appellate Authority held that Section 7(4)(c) of the Act provides that the controlling authority shall determine the matter or matters in dispute as specified in Sub-section (a) and if as a result of such enquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount. That is the only order contemplated under Sub-section (4) of Section 7. It can only be a final order and not an order deciding a preliminary issue. It was observed that the second proviso to Section 7(7) provides that no appeal by an employer shall be admitted unless at the time of preferring the appeal the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under Sub-section (4), or deposits with the appellate authority such amount. Such a deposit will arise only when a final order is passed under Section 7(4)(c) of the Act. 5. I am of the view that the third respondent was justified in holding that under Section 7(7) of the Act an appeal will lie only against the final order of the controlling authority. As stated by the third respondent, Section 7(4)(a) read with Section 7(4)(c) and the second proviso to Section 7(7) of the Act are pointers to show that an appeal is contemplated under Section 7(7) of the Act only against the final order of the controlling authority. 6. The petitioners' counsel contended that Ext. P-3 order, in both the cases, holding that the second respondent has jurisdiction to hear the applications is final, in that a decision regarding a fundamental matter affecting the jurisdiction of the Tribunal has been finally decided by the second respondent and so Ext. P-3 order, in both the cases, is a final order. I am unable to accept the said plea. All that was done by the second respondent was to hold that the petition is maintainable. The maintainability of the petition was raised as a preliminary issue. The said issue was decided against the petitioner. By holding that the petition is maintainable, the further adjudication is to continue and there is no final order adjudicating the rights and liabilities of the parties to the proceeding. The rights and liabilities of the parties are yet to be decided in the adjudication to be made. If, on the other hand, the second respondent had decided the preliminary issue in favour of the petitioner and held that the petition is unsustainable, thereby dismissing it, it would have been a final order, in that the petition would have been finally decided or closed. The observations of the Supreme Court in Bant Singh v. Shanti Devi AIR 1967 SC 1360 at page 1362, para 3, are apposite in this context. They are as follows: "....The principle was thus recognised that the word "order" used in such context is not wise enough to include every order, whatever be its nature, and particularly orders which only dispose of interlocutory matters. In the case before us also all that was done by the application presented by the appellant on the 13th March, 1961, was to raise a preliminary issue about the maintainability of the suit on the ground that the suit had abated by virtue of Section 50(2) of the Act of 1958. The Court went into that issue and decided it against the appellant. If the decision had been in favour of the appellant and the suit had been dismissed, no doubt there would have been a final order in the suit having the effect of a decree (see the decision of the Full Bench of the Lahore High Court in Ram Charan Das v. Hira Nand, AIR 1945 Lah. 298 (FB). On the other hand if as in the present case, it is held that the suit has not abated and its trial is to continue, there is no final order deciding the rights or liabilities of the parties to the suit. The rights and liabilities have yet to be decided after full trial has been gone through. The decision by the court is only in the nature of a finding on a preliminary issue on which would depend the maintainability of the suit. Such a finding cannot be held to be an order for purposes of Section 34 of the Act of 1952, and consequently no appeal against such an order would be maintainable. It was indicated by this Court in the case of the Central Bank of India Ltd., Civil Appeal No. 1339 of 1966 dated 12-9-1966 reported in AIR 1967 SC, 799 (supra) that, in such a case, it is open to the appellant to canvass the error, defect, or irregularity, if any, in the order in an appeal from the final order passed in the proceedings for eviction. In the present case also, therefore, it is clearly open to the appellant to raise this plea of abatement of the suit, if and when he files an appeal against a decree for eviction passed by the trial Court". 7. In the light of the above weighty observation of the Supreme Court and in view of Section 7(4)(a) read with Section 7(4)(c) and the second proviso to Section 7(7) of the Act, I hold that the appeals tiled by the petitioner before the third respondent were rightly held to be unsustainable in Ext. P-5 order in both the cases. No interference is called for with Ext. P-5. 8. No other point was argued, at the time of hearing of the Original Petitions. The O.Ps. are without merit. They are dismissed, in limine.