SC recalls its decision after just 2 months, teachers can also claim gratuity

The Hon’ble Supreme Court, on 07.01.2019, while placing reliance on its decision in Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer and Others(2004) 1 SCC 755 and reiterating what was held therein had observed  that in the aforementioned case the Hon’ble Supreme Court did not make any distinction between the teachers inter se and nor made any distinction as to in which type of educational institute the teacher is working for determining his/her entitlement to claim the gratuity under the Payment of Gratuity Act.

However, after the pronouncement of the order in this appeal, it came to the notice of the Hon’ble Supreme Court that consequent upon the decision of the Supreme Court rendered in Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer and Others, the Parliament amended the definition of the word “employee” as defined in Section 2(e) of the Payment of Gratuity Act, 1972 by Amending Act No. 47 of 2009 on 31.12.2009 with retrospective effect from 03.04.1997. This amendment was not brought to the notice of the Hon’ble Supreme Court while it was passing the order on 07.01.2019 in the matter of Birla Institute of Technology v. The State of Jharkhand & Ors.

Therefore, the Hon’ble Supreme Court, suo motutook up the appeal to its file and directed it to be listed on the Board. On 09.01.2019 the appeal was stayed on the ground that there was a prima facie error in the judgement and the operation of the judgement was also stated. The matter was thus reheard.

Therefore, after rehearing the matter of Birla Institute of Technology v. The State of Jharkhand & Ors., the Hon’ble Supreme Court, today i.e. on 7th March 2019 observed that by virtue of the Amending Act No. 47 of 2009, the law laid down by the Hon’ble Supreme Court in the case of Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer and Others was no longer applicable against the teachers, as if not rendered and teachers were held entitled to claim the amount of gratuity under the Payment of Gratuity Act from their employer with effect from 03.04.1997.

The Hon’ble Supreme Court observed that:

The decision rendered in Ahmadabad Pvt. Primary Teachers Association vs.Administrative Officer and Others [(2004) 1 SCC 755] therefore, led the Parliament to amend the definition of “employee” as defined in Section 2 (e) of the Payment of Gratuity Act by amending Act No. 47 of 2009 on 31.12.2009 with retrospective effect from 03.04.1997. (Para 25)

The definition of “employee” as defined under Section 2(e) was accordingly amended with effect from 03.04.1997 retrospectively vide Payment of the Gratuity (Amendment) Act, 2009 (No. 47 of 2009) published on 31.12.2009. (Para 27)

In the light of the amendment made in the definition of the word “employee” as defined in Section 2(e) of the Act by Amending Act No. 47 of 2009 with retrospective effect from 03.04.1997, the benefit of the Payment of Gratuity Act was also extended to the teachers from 03.04.1997. (Para 28)

In other words, the teachers were brought within the purview of “employee” as defined in Section 2(e) of the Payment of Gratuity Act by Amending Act No. 47 of 2009 with retrospective effect from 03.04.1997. (Para 29)

The effect of the amendment made in the Payment of Gratuity Act vide Amending Act No. 47 of 2009 on 31.12.2009 was two­fold. First, the law laid down by this Court in the case of Ahmadabad Pvt. Primary Teachers Association vs.Administrative Officer and Otherswas no longer applicable against the teachers, as if not rendered, and Second, the teachers were held entitled to claim the amount of gratuity under the Payment of Gratuity Act from their employer with effect from 03.04.1997. (Para 30)

Pendency of any writ petition by itself does not affect the constitutionality of the Amending Act, and nor does it affect the right of a person. (Para 33)

It is only when the Court declares a Statute as being ultra vires the provisions of the Constitution then the question may arise to consider its effect on the rights of the parties and that would always depend upon the declaration rendered by the Court and the directions given in that case. (Para 34)

Copy of judgement: Judgement_07-Mar-2019

-Tushar Kaushik

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