'Hypocrite' 'Illegal': Calcutta HC Directs State Gov To Initiate Proceedings Against Recovery Officer For Rejecting Claim Of Jute Mill Worker Under Payment of Gratuity Act, 1972

The Calcutta High Court recently came down heavily on the Certificate Officer, an officer in the District Magistrate's Office, Howrah for denying the claim for superannuation of a retired Jute Mill worker under the provisions of the Payment of Gratuity Act, 1972. The Court further set aside the order of the Certificate Officer by terming it as 'illegal and bad in the eye of law'. 

Justice Abhijit Gangopadhyay observed that the Certificate Officer (CO) had deliberately deprived the jute mill worker's lawful claim for more than 15 years in order to favour the owners of the Jute Mill.

"While rejecting the requisition he himself did not follow the principles of natural justice and without giving any party any opportunity of hearing rejected the requisition. Such act of the said CO is ex facie hypocrite and illegal and bad in the eye of law", the Court opined. 

Accordingly, the Court directed the  Principal Secretary or the Secretary Labour Department, Government of West Bengal to initiate proceedings against the Certificate Officer under Section 9 (1) of the Payment of Gratuity Act, 1972 within a period of 2 weeks. 

"The vigilance Commissioner of State of West Bengal is directed to initiate an inquiry against that particular Certificate Officer who dealt with the gratuity Case No 72/15/G/HOW and passed the order dated 21.10.2019 and to take all steps required for enquiring the action of the said particular Recovery Officer and to take subsequent action thereafter", the Court further ordered. 

Background

In the instant case, the petitioner was a worker at a Jute Mill called Delta Limited and had joined service on April 27, 1970. Thereafter he had been superannuated on May 29, 2003. As his gratuity had not been paid by the jute mill, he had initiated proceedings in accordance with the Payment of Gratuity Act, 1972.

Subsequently, a gratuity case was initiated by the concerned Controlling Authority who was the Assistant Labour Commissioner after receiving an application from the petitioner. The Assistant Labour Commissioner came to the conclusion that an amount of Rs. 1,83,119 had to be paid by the jute mill to the petitioner. Accordingly, he had issued requisition for a certificate to the Certificate Officer, an officer in the District Magistrate's Office of the district of Howrah.

The Certificate Officer after receiving the requisition started a case under the Bengal Public Demands Recovery Act, 1913 (PDR Act) and ultimately vide order dated October 21, 2019 he had rejected the requisition for certificate after recording that the Assistant Labour Commissioner had not abided by the Rules under the Gratuity Act. Accordingly, the instant petition had been filed for setting aside the order of the Certificate Officer.

Observations

The Court at the outset outlined that the issue in consideration was whether for recovery and payment of unpaid gratuity to a superannuated worker the Payment of Gratuity Act, 1972 is sufficient for realizing and paying the due gratuity amount or whether the Controlling Authority after taking necessary steps under the Payment of Gratuity Act, 1972 has to again follow the provisions outlined under the PDR Act, 1913.

Placing reliance on Section 8 of the Payment of Gratuity Act, 1972, the Court observed that if gratuity is not paid by the employer within the prescribed time, the controlling authority has to issue a certificate to the Collector for the recovery of the outstanding amount (with compound interest) as arrears of land revenue.

"Three things are required to be taken note of in the above provision of recovery of gratuity: (i) The Controlling Authority has to issue a certificate (on an application made to it by the entitled person); (ii) Certificate is to be issued to the Collector; (iii) The Collector shall recover the payable gratuity with interest as arrears of land revenue and pay the same to the persons entitled thereto", the Court noted further.

The Court further noted that it was the duty of the Certificate Officer to recover the amount with compound interest from the employer as arrears of land revenue and accordingly pay the same to the petitioner.

Reprimanding the conduct of the Certificate Officer, the Court observed that the Certificate Officer despite being 'an erudite scholar of law' had 'given complete advantage to the Jute Mill' so that the owners of the Jute Mill could avoid payment of gratuity to the petitioner. Referring to a letter of the Assistant Labour Commissioner dated September 16, 2019, the Court further noted that the Certificate Officer had played the same role for a large number of claim of gratuity cases.

It was further noted that the Assistant Labour Commissioner in its order had made 'absolutely no reference' to referring to the provisions of the Bengal PDR Act, 1913.

"This Bengal PDR Act 1913 is wholly the invention of the CO for rejecting the requisition", the Court underscored. Thus, the Court opined that the Certificate Officer had intended for the 'old and aged deprived person, a retired worker to prefer appeal against his order i.e. an appeal under PDR Act'.

Opining further that the Certificate Officer had knowledge that the Assistant Labour Commissioner had issued a 'certificate' and not a 'requisition for a certificate', the Court observed,

"From this written notes of CO (vide page 3 and 4 thereof) it is evident that the concerned CO always understood „the requisition for a certificate‟ as a "certificate" itself and in the written notes of submission it is categorically mentioned that "to make his signature upon such certificate being issued at the behest of the controlling authority" and "question of recovering of any demand incorporated in the certificate issued by the controlling authority". Therefore, it was a clear understanding of the CO that a certificate was issued by the Controlling authority (i.e. the ALC) and not a requisition for it."

Despite understanding that it was not a 'requisition for a certificate' but a "certificate" issued by the Assistant Labour Commissioner, the Certificate Officer had 'deliberately made false statement and made false representation by introducing Bengal public demands recovery Act 1913', the Court highlighted further.

"A seasoned Government officer being the CO despite understanding that a "certificate" for realization of gratuity amount under Section 8 of the Act was sent to him, has instead of executing the certificate in accordance with the Payment of Gratuity Act, 1972 rejected it by exercising some power not only not unknown to the relevant act being the gratuity Act 1972 but also an invention of the PDR Act out of noting. It is wholly disbelievable to this court that the CO who knows rule 15 of the West Bengal payment of gratuity rules 1973 did not know section 8 of the payment of gratuity Act 1973", the Court observed further. 

Directions Issued

Accordingly, the Court issued the following directions,

• The impugned order of the Recovery Officer dated 21.10.2019 (at annexure Page-5 of the writ application) is set aside and quashed. The present CO shall execute the order of payment of gratuity as appears from annexure P-1 of the writ application following Section 8 of the Payment of Gratuity Act, 1972 forthwith.

• The Authority under the Payment of Gratuity Act, 1972 shall calculate the rate of interest including the compound interest on the gratuity amount from the date of default for payment of gratuity and shall communicate the same to the respondent No. 4 within a period of 4 weeks from the date of communication of this order who shall pay the said amount along with payment of gratuity to the petitioner.

• If the due gratuity amount and the interest including compound interest is not paid by the Respondent No. 4 namely M/s. Delta Limited to the writ petitioner the appropriate Government and the Controlling Authority shall take immediate steps for Recovery of the gratuity amount with the interest including the compound interest thereon.

The Court further directed the concerned Jute Mill owners to pay costs to the tune of Rs. 5 Lakh, half of which was directed to be paid to the petitioner and the rest to the High Court Legal Services Authority within a period of 4 weeks. The Registrar General was further directed to communicate the order to the Principal Secretary/the Secretary, Department of Labour Government of West Bengal. 

Case Title: Toyeb Ali Midday v. State of West Bengal & Ors

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