M/S AA NUTS v State of Kerala & Others

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN`** ## **`THURSDAY, THE 10TH DAY OF AUGUST 2023 / 19TH SRAVANA, 1945 WP(C) NO.18840 OF 2023`** ## **`PETITIONER:`** ``` M/S.AA NUTS, KILIKOLLOOR, KOLLAM-691004, REP.BY ITS PARTNER M.A ANZAR MOHAMMED, S/O.M.ABDUL AZEEZ, SHAMAN GARDENS, KILIKOLLOOR, KOLLAM, PIN – 691004 ``` ``` BY ADV ESM.KABEER ``` ## **`RESPONDENTS:`** - **`1 THE STATE OF KERALA, REP. BY SECRETARY, DEPARTMENT OF LABOUR, SECRETARIAT, TRIVANDRUM, PIN – 695001`** - **`2 THE REGIONAL JOINT LABOUR COMMISSIONER OFFICE OF REGIONAL JOINT LABOUR COMMISSIONER, KAANKATHU MUKKU, KOLLAM, PIN – 691013`** - **`3 THE DEPUTY LABOUR COMMISSIONER (THE controlling authority UNDER THE PAYMENT OF GRATUITY ACT, 1972), KAANKATHU MUKKU, KOLLAM, PIN – 691013`** - **`4 G.KARTHIKEYAN, AGED 60 YEARS, S/O.GOPALA PILLAI, PEROOR MELATHIL HOUSE, THEVALAPPURAM P.O, PUTHOOR, KOLLAM-691507.`** ``` BY ADVS SRI.R.KISHORE SRI.V.S.SREEJITH, GOVERNMENT PLEADER ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C) No.18840 of 2023 2 ## **`JUDGMENT`** ``` The petitioner, a partnership firm, has filed this writ petition challenging Ext.P1 order passed by the controlling authority under the Payment of Gratuity Act, 1972 [for brevity, ‘the Act’] on an application preferred by the 4[th]respondent employee. ``` ``` 2. The 4[th] respondent filed an application before the 3[rd]respondent, the controlling authority, claiming gratuity. According to the 4[th] respondent, she started working in the establishment of the petitioner from 16.04.2001 and continued till 31.12.2018 and her last drawn salary was Rs.15,000/-. It was contended that though she requested the employer to determine and pay the gratuity, the same was not paid. The controlling authority issued notice to the ``` WP(C) No.18840 of 2023 3 ``` employer. However, the notice was returned with the postal endorsement “intimation 13.04.2022”. Finding that the employer has willfully refused notice, the employer was declaredex parteon 28.06.2022. The controlling authority proceeded with the matter and passed Ext. P1 order holding that the 4[th] respondent is entitled for gratuity of Rs.1,55,769/- with 10% interest from 01.01.2019. ``` ``` 3. According to the petitioner, they did not receive the notice of the proceedings before the controlling authority and came to know about the award only when revenue recovery proceedings were initiated against them. Though an appeal was preferred against Ext.P1 order, it was rejected for non-deposit of the amount required under the 2[nd] proviso to Section 7(7) of the Act. The petitioner,thereafter,submittedExt.P2 representation before the controlling authority stating that they have not received any notice in ``` WP(C) No.18840 of 2023 4 ``` connection with the proceedings before the authority and accordingly prayed for setting aside the ex parte order and to rehear the matter. Since there was no response from the controlling authority on Ext.P2, the petitioner has filed this writ petition. ``` ``` 4. A counter affidavit has been filed by the 4[th] respondent contending that the employer flouted the statutory provisions with regard to payment of gratuity when it became due and more than 60 Gratuity cases are pending against the petitioner and the petitioner had purposefully evaded service of notice in the Gratuity case and though Ext. P1 order was served on the petitioner, the amount was not paid and the 4[th]respondent has filed application under Section 8 of the Act for recovery of gratuity. It is further contended that since the petitioner had already preferred an appeal against Ext. P1 award, Ext. P2 application ``` WP(C) No.18840 of 2023 5 ``` before the controlling authority is not maintainable. ``` ``` 5. Heard Sri. E.S.M.Kabeer, the learned counsel for the petitioner, Sri. R. Kishore, the learned counsel for the 4[th] respondent and Sri. V.S. Sreejith, the learned Government Pleader. ``` ``` 6.The notice issued to the petitionerby the controlling authority was returned with the postal endorsement “intimation 13.04.2022”. Finding that the petitioner has willfully refused notice, the petitioner was declaredex parteon 21.12.2022. Since the notice was returned with the endorsement 'intimation', it will amount to deemed service of notice on the petitioner. Rule 11(5) of the Payment of Gratuity (Central) Rules, 1972 provides that, if the employer concerned fails to appear on the specified date of hearing after due service of notice without sufficient cause, the controlling authority may proceed to hear and ``` WP(C) No.18840 of 2023 6 ``` determine the applicationex parte. It further provides that if the applicant fails to appear on the specified date of hearing without sufficient cause, the controlling authority may dismiss the application. However, the proviso to Rule 11(5) provides that an order under Rule 11(5) may, on good cause being shown within 30 days of the said order, be reviewed and the application re-heard after giving not less than 14 days’ notice to the opposite party of the date fixed for re-hearing the application. The petitioner did not approach the controlling authority to set aside theex parteorder and toreview the order within the statutory period. It is trite law that, once a cause of action has become time barred, a litigant cannot seek to revive the same by taking recourse to the extra ordinary jurisdiction of this Court under Article 226 of the Constitution of India. ``` WP(C) No.18840 of 2023 7 ``` 7. It is seen from the averments in the writ petition that though the petitioner had preferred an appeal against Ext.P1 order, the same was rejected since the petitioner did not deposit the amount as required under the second proviso to Section 7(7) of the Act. There is no challenge to the order rejecting the appeal. Sri. Kishore, referring to the explanation to Order 9 Rule 13 of the Code of Civil Procedure and the decision of the Hon'ble Supreme Court in Shyam Sundar Sarma v. Pannalal Jaiswal [2005 KHC 34: 2005 (1) KLT 198: (2005) 1 SCC 436: AIR 2005 SC 226], would contend that an application under Order 9 Rule 13 of CPC to set aside Ext. P1 award would not lie before the controlling authority as the appeal has been rejected for non deposit of the amount as required under the second proviso to Section 7(7) of the Act. In Shyam Sundar Sarma, the Hon'ble Supreme Court, considering the scope of the explanation to ``` WP(C) No.18840 of 2023 8 ## **`Order 9 Rule 13 of the CPC, held as follows:`** ``` “13. In the context of the explanation to O.9 R.13 of the Code, the question was squarely considered by this Court in Rani Choudhury's case (supra). The High Court, in our view, has rightly held that the decision of this case is directly covered by that decision. Therein, the plaintiff, the wife, obtained an ex parte decree for divorce against the husband, the defendant. The husband preferred an appeal in the High Court against the decree and also made an application under S.5 of the Limitation Act for condoning the delay in filing that appeal. The High Court dismissed the appeal as being time barred. The husband, the defendant, then filed a petition under O.9 R.13 of the Code for setting aside the ex parte decree along with an application under S.5 of the Limitation Act. The Trial Court dismissed the application holding that no sufficient cause was made out for condoning the delay in filing the petition under O.9 R.13 of the Code. The husband filed a Civil Miscellaneous Appeal in the High Court challenging the said order of the Trial ``` WP(C) No.18840 of 2023 9 ``` Court. The High Court took the view that the explanation to O.9 R.13 of the Code did not create a bar to the maintainability of the petition under that rule as the appeal against the ex parte decree had been dismissed not on merits but on the ground of limitation by not accepting the application for condonation of delay which meant that no appeal was preferred in the eye of law. This view of the High Court was challenged in appeal before this Court. It was argued that the High Court has misunderstood the scope and ambit of the explanation to O.9 R.13 of the Code and that in the circumstances, the High Court should have held that the petition under O.9 R.13 of the Code would not lie. This Court accepted that contention. This Court held that where there has been an appeal against an ex parte decree and the appeal has not been withdrawn by the appellant and had been disposed of on any ground the application under O.9 R.13 of the Code would not lie and should not be entertained. Hence, even though the appeal against the ex parte decree was disposed of on the ground of limitation and not on merits, the explanation to O.9 R.13 of the ``` WP(C) No.18840 of 2023 10 ``` Code was attracted and hence no petition under O.9 R.13 of the Code would lie. On the scope of the explanation, it was stated that the disposal of the appeal as contemplated in the explanation was not intended to mean or imply a disposal on merits resulting in the merger of the decree of the Trial Court with a decree, if any, of the Appellate Court on the disposal of the appeal. The disposal of the appeal may be on any ground and though the withdrawal of an appeal by an appellant is also to be considered a disposal of the appeal, the same has been expressly exempted by the explanation. It was also observed that the legislative intent incorporated in the explanation to O.9 R.13 of the Code was to confine the defendant to a single course of action and to discourage the prolonging of the litigation on the ex parte decree, namely, by preferring an application to the Trial Court under O.9 R.13 of the Code for setting aside the decree and by filing an appeal to a superior Court against it. If he did not withdraw the appeal filed by him or allowed the appeal to be disposed of on any other ground, he was denied the right to apply under O.9 R.13 of the Code. The Court ``` WP(C) No.18840 of 2023 11 ``` also clarified that by the introduction of the explanation, the area of operation of the doctrine of merger was enormously extended. By virtue of the explanation, the disposal of the appeal on any ground whatever, apart from its withdrawal, constituted sufficient reason for bringing the ban into operation. In the light of this, it was held that though in that case the appeal filed by the husband against the ex parte decree was dismissed on the ground of it being barred by limitation, it was a disposal of the appeal and the petition under O.9 R.13 of the Code was hit by the explanation. In P. Kiran Kumar v. A.S. Khadar and Others (JT 2002 (Suppl.1) SC 29 : (2002 (5) SCC 161) this Court followed the decision in Rani Choudhury (supra) and held that the dismissal of the appeal against an ex parte decree as barred by limitation, prevented the Trial Court which passed the ex parte decree, from exercising its power under O.9 R.13 of the Code in view of the explanation.” ``` ``` (underlining supplied by this Court) ``` ## **`8. Since the appeal filed by the petitioner`** WP(C) No.18840 of 2023 12 ``` has been rejected for non deposit of the amount as required under the second proviso to Section 7(7) of the Act, the petitioner cannot now fall back upon the remedy under Order 9 Rule 13 of the CPC. ``` **9** **`. Payment of Gratuity Act, 1972 is a welfare legislation meant for the benefit of the employees` .** **`It is a complete code by itself. For the enforcement of its provisions, the Act provides for hierarchy of remedies. Section 4 of the Act casts an obligation upon an employer to pay the gratuity due to an employee on termination of his employment. Section 7 of the Act obliges the employer to determine the amount of gratuity and pay the same to the persons entitled to receive the same. Section 7 (4)(b) deals with adjudication of dispute by the controlling authority. Section 7(7) provides for appeal against the order of the controlling authority. Though the controlling authority issued notice to the petitioner in the`** WP(C) No.18840 of 2023 13 ``` Gratuity case, the petitioner failed to appear before the controlling authority and the petitioner was set ex parte and Ext.P1 award was passed. The petitioner did not avail of the remedy provided under Rule 11 (5) of the Rules to set aside the ex parte order and toreview the order within the statutory period. The said causeof action having become time barred, the petitioner cannot seek to revive the same invokingthe writ jurisdiction of this Court under Article 226 of the Constitution. Since the appeal filed by the petitioner has been rejected for non deposit of the amount as required under the second proviso to Section 7(7) of the Act, the petitioner cannot invoke the remedy under Order 9 Rule 13 of the CPC and cannot seek a direction to the controlling authority to consider Ext. P2 representation filed for setting aside the ex parte order and to rehear the matter. I do not find any reason to interfere ``` WP(C) No.18840 of 2023 14 ``` with Ext. P1 order passed by the controlling authority invoking the jurisdiction under Article 226 of the Constitution of India. ``` ``` The writ petition fails and accordingly, the same is dismissed. ``` ``` Sd/- MURALI PURUSHOTHAMAN JUDGE ``` ``` sp/10/08/2023 ``` WP(C) No.18840 of 2023 15 ## **`APPENDIX`** ## **`PETITIONER'S EXHIBITS :-`** ``` EXHIBIT-P1COPY OF THE ORDER PASSED BY THE 3RD RESPONDENT DATED 21.12.2022 ``` ``` EXHIBIT-P2 ``` ``` COPY OF THE REPRESENTATION SUBMITTED BEFORE THE 3RD RESPONDENT DATED 10.05.2023 ```