Himachal Pradesh High Court
_____________________________________________________________________ vs State Of Himachal Pradesh And Ors on 16 July, 2025
Author: Sandeep Sharma
Bench: Sandeep Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No.11681 of 2024
.
Date of Decision: 16.7.2025
_____________________________________________________________________
Dr. Sukhvir Singh and Ors.
.........Petitioners
Versus
State of Himachal Pradesh and Ors.
.......Respondents
Coram
Hon'ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting? Yes.
For the Petitioners: Mr. V.B. Verma, Advocate.
For the respondents: Mr. Yudhvir Singh Thakur, Advocate, for
respondent No.1.
Mr. Anup Rattan, Advocate General with Mr.
Rajan Kahol, Mr. Vishal Panwar and Mr. B.C.
Verma, Additional Advocates General and Mr.
Ravi Chauhan, Deputy Advocate General, for
respondent No.2.
___________________________________________________________________________
Sandeep Sharma, J. (Oral)
By way of instant petition, petitioners have prayed for
following main reliefs:
“I. Issue a writ of mandamus directing the respondent no-1
college to release the due and admissible amount of gratuity to
the petitioners.
II. That the petitioners may further be held entitled to the
payment of interest @9% p.a. from the date of entitlement.”
2. Precisely the facts relevant for adjudication of the case at
hand as emerge from the pleadings adduced on record by the
respective parties are that petitioners herein were appointed as
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Lecturers in MLSM College, Sundernagar, District Mandi, Himachal
.
Pradesh i.e. respondent No.1 on 13.7.2002, 22.7.2003 and 6.7.2005,
respectively, however subsequently, in the year 2020, petitioners No. 1
and 2 were selected as Assistant Professors in Himachal Pradesh
University and prior to their resignation from respondent No.1-College,
they had rendered service of five years. Petitioner No.3 was selected as
Project Officer (Teacher) in Institute of Integrated Himalayan Studies,
Himachal Pradesh University and he had completed five years service
prior to his resignation from respondent No.1-College, Sundernagar.
3. Though after resigning from the respondent-College,
petitioners made oral as well as written requests to afore college for
release of payment of gratuity, but fact remains that till date, same
has not been released on the pretext that they had not rendered
service of fifteen years prior to their resignation, which is otherwise
required in terms of Chapter 38, Rule 12 (A) of Appendix-A of
Himachal Pradesh University Ordinance, which provides that in
addition to the benefits of Provident Fund, the governing body of
college shall grant to every teacher at the time of retirement or death,
whichever is earlier, for efficient and faithful service rendered, a
gratuity of a sum calculated at a rate of half month’s pay last drawn
for each completed year of service, provided that he should have
rendered minimum service of fifteen years prior to his
superannuation.
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4. In nutshell, case of the respondent-college is that since
.
same is governed by the ordinances/statutes of the Himachal Pradesh
University, prayer made by the petitioners for grant of release of
gratuity can only be considered in terms of provisions contained under
ordinances/statutes of the University. In the afore background,
petitioners have approached this Court in the instant proceedings
praying therein for the reliefs as have been reproduced herein above.
5. I have heard the learned counsel for the parties and
carefully gone through the record.
6. Precisely, the grouse of the petitioners, as has been
highlighted in the petition and further canvassed by Mr. V.B. Verma,
learned counsel for the petitioners, is that payment of gratuity could
not have been denied to the petitioners for their having not served the
respondent-College for fifteen years, especially when, payment of
Gratuity Act 1972 (in short the “Act”) itself provides that minimum
service required for payment of gratuity under the Act shall be five
years. Mr. Verma, further submitted that though no cogent and
convincing material has been placed on record by the respondent-
college to demonstrate that college concerned is governed by the
ordinances/statutes of Himachal Pradesh University, but even if it is
presumed that same is governed by the ordinances/statutes,
provisions contained in the same cannot override the provisions
contained in Act. To substantiate his aforesaid arguments, Mr.
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Verma, invited attention of this court to Section 14 of the Act. He also
.
placed reliance upon judgment passed by Division Bench of this Court
in case titled Chaudhary Sarwan Kumar Himachal Pradesh Krishi
Vishvavidyalaya, Palampur v. Nag (alongwith connected matter)
2011 (3) Shim.LC 365, wherein, in similar facts and circumstances,
Division Bench of this Court proceeded to hold that the provisions of
this Act or any rule made thereunder shall have effect notwithstanding
anything inconsistent therewith contained in any enactments other
than this Act or in any instrument or contract having effect by virtue
of any enactment other than this Act.
7. To the contrary, Mr. Yudhvir Singh Thakur, Advocate,
appearing on behalf of respondent No.1-College, while justifying the
impugned action of the respondent, vehemently argued that since
college is governed by the ordinances and statutes of Himachal
Pradesh University, with whom, it otherwise stands affiliated,
condition of minimum service of fifteen years, cannot be said to be
arbitrary, rather same having been provided under the statute, rightly
came to be invoked by the respondent-college, while considering claim
of the petitioners for payment of gratuity under the Act.
8. Admittedly, in the case at hand, there is no dispute that
none of the petitioners rendered fifteen years service with respondent-
college prior to their tendering resignation, but at the same time, it is
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also not in dispute that all of them have completed five years service
.
prior to their resigning from the college concerned.
9. Precisely, the question which needs to be determined in
the case at hand is “whether provisions contained in
ordinances/statutes of University shall have overriding effect on the
provisions contained under the Act, which is Central Legislation.”
10. Though admittedly, no material has been placed on record
to demonstrate that respondent college is governed by the ordinances
and statutes of University, wherein admittedly provision has been
made of 15 years service for payment of gratuity under the Act, but
even if it is presumed that ordinances and statutes of the university
shall be binding upon the respondent-college, this court having
perused Section 14 of the Act, is persuaded to agree with Mr. V. B.
Verma, learned counsel appearing for the petitioners that in no
circumstance, provision, if any, contained under the
statutes/ordinances of the Himachal Pradesh University, containing
therein provision of minimum service of fifteen years for grant of
gratuity under the Act, can be made applicable in the case of the
petitioners, rather their claim of gratuity under the Act, can only be
considered under the provisions contained under the Act.
11. At this stage it would be apt to take note of Section 14 of
the Act, which reads as under:
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“14. Act to override other enactments, etc. – The provisions of
this Act or any rule made thereunder shall have effect.
notwithstanding anything inconsistent therewith contained in
any enactment other than this Act or in any instrument or
contract having effect by virtue of any enactment other thanthis Act.”
12. Bare perusal of afore Section clearly provides that
provisions of this Act or any rule made thereunder shall have effect
notwithstanding anything inconsistent therewith contained in any
enactment other than this Act or in any instrument or contract having
effect by virtue of any enactment other than this Act. Since in the
case at hand, claim of the petitioners has been refuted on the ground
that petitioners herein have not rendered fifteen years’ service as
required under Statute/ordinance of the University prior to their
tendering resignation, they are not entitled to gratuity under the Act,
prayer made by the petitioners for release of gratuity after their having
rendered more than five years service in respondent college, deserves
to be allowed. Section 4 of the Act, clearly provides that gratuity shall
be payable to an employee on the termination of his employment after
he has rendered continuous service for not less than five years.
Section 4 (b), clearly talks about payment of gratuity on retirement or
resignation. In the case at hand, petitioners after having rendered
more than five years service have resigned and as such, in terms of
Section 4 (b), they are entitled to be released gratuity.
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13. In Chaudhary Sarwan Kumar Himachal Pradesh Krish
.
Vishvavidalaya, Palampur (supra), Hon’ble Division Bench of this
Court had an occasion to deal with similar issue and it after having
taken note of various provisions contained in payment of gratuity Act
as well as statutes/ordinance of University, proceeded to hold as
under:
“4. Payment of gratuity –
(1) Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for not less
than five years, –
r (a) On his Superannuation, or
(b) On his retirement or resignation, or
(c) On his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall
not be necessary where the termination of the employment of anyemployee is due to death or disablement:
Provided further that in the case of death of the employee, gratuity
payable to him shall be paid to his nominee or, if no nomination hasbeen made, to his heirs, and where any such nominees or heirs is a
minor, the share of such minor, shall be deposited with the controllingauthority who shall invest the same for the benefit of such minor in
such bank or other financial institution, as may be prescribed, until
such minor attains majority.
Explanation. – For the purposes of this section, disablement means
such disablement as incapacitates an employee for the work which he
was capable of performing before the accident or disease resulting in
such disablement.
(2) For every completed year of service or part thereof in excess of six
months, the employer shall pay gratuity to an employee at the rate of
fifteen days wages based on the rate of wages last drawn by the
employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall
be computed on the average of the total wages received by him for a::: Downloaded on – 21/07/2025 21:16:02 :::CIS
-8-period of three months immediately preceding the termination of his
employment, and, for this purpose, the wages paid for any overtime.
work shall not be taken into account:
Provided further that in the case of [an employee who is employed in a
seasonal establishment and who is not so employed throughout the
year], the employer shall pay the gratuity at the rate of seven days’wages for each season. [ Explanation . -In the case of a monthly rated
employee, the fifteen days wages shall be calculated by dividing the
monthly rate of wages last drawn by him by twenty-six and
multiplying the quotient by fifteen.
(3) The amount of gratuity payable to an employee shall not exceed
[three lakhs and fifty thousand] rupees.
(4) For the purpose of computing the gratuity payable to an employee
who is employed, after his disablement, on reduced wages, his wagesfor the period preceding his disablement shall be taken to be the
wages received by him during that period, and his wages for the
period subsequent to his disablement shall be taken to be the wages
as so reduced;
(5) Nothing in this section shall affect the right of an employee to
receive better terms of gratuity under any award or agreement or
contract with the employer.
(6) Notwithstanding anything contained in sub-section,-
(a) the gratuity of an employee, whose services have been
terminated for any act, wilful omission or negligence causingany damage or loss to, or destruction of, property belonging
to the employer, shall be forfeited to the extent of the damageor loss so caused; transfer
(b) the gratuity payable to an employee [may be wholly or
partially forfeited]- (i) if the services of such employee have
been terminated for his riotous or disorderly conduct or any
other act of violence on his part, or (ii) if the services of such
employee have been terminated for any act which constitutes
an offence involving moral turpitude, provided that such
offence is committed by him in the course of his
employment.”
3. A perusal of the statutory provisions, as extracted above, would
clearly show that the Act does not make any difference as to whether
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an employee is paid daily wages or weekly wages or monthly wages.
The condition is only that he should be employed by the employer on
.
wages in an establishment covered by the Act and should be in
continuous service, as required under Section 2-A of the Act. Even
seasonal employees and piece-rated employees are covered by the Act
subject to their fulfilling the prescribed requirements. Therefore, a
daily waged employee is, thus, covered by the Act.
4. It is the contention of the University that its service conditions do
not provide for gratuity. Section 14 of the Act provides as follows:-
“The provisions of this Act or any rule made thereunder shall
have effect notwithstanding anything inconsistent therewith
contained in any enactments other than this Act or in any
instrument or contract having effect by virtue of any
enactment other than this Act.”
The petitioner’s establishment does not have a scheme for payment of
gratuity to daily waged employees in case they otherwise qualify for
gratuity under the Act, since the Payment of Gratuity Act has an
overriding effect over other enactments. Therefore, the daily waged
employees of the petitioner’s University, subject to their fulfilling other
conditions, are entitled for gratuity. This issue in principle has been
decided by the Supreme Court in Municipal Corporation of Delhi vs.
Dharam Prakash Sharma, AIR 1991 SUPREME COURT 293. At
paragraph 2 of this judgment, it has been held as follows:-
“The short question that arises for consideration is whether an
employee of the MCD would be entitled to payment of gratuity under
the Payment of Gratuity Act when the MCD itself has adopted theprovisions of the CCS (Pension) Rules, 1972 (hereinafter referred to as
the “Pension Rules”), whereunder there is a provision both for
payment of pension as well as of gratuity. The contention of the
learned counsel appearing for the appellant in this Court is that the
payment of pension and gratuity under the Pension Rules is a
package by itself and once that package is made applicable to the
employees of the MCD, the provisions of payment of gratuity under
the Payment of Gratuity Act cannot be held applicable. We have
examined carefully the provisions of the Pension Rules as well as the
provisions of the Payment of Gratuity Act. The Payment of Gratuity
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any provision therein which excludes its applicability to an employee
who is otherwise governed by the provisions of the Pension Rules it is.
not possible for us to hold that the respondent is not entitled to the
gratuity under the Payment of Gratuity Act. The only provision which
was pointed out is the definition of ’employee’ in S. 2(e) which
excludes the employees of the Central Government and the StateGovernments receiving pension and gratuity under the Pension Rules
but not an employee of the MCD. The MCD employee, therefore, would
be entitled to the payment of gratuity under the Payment of Gratuity
Act. The mere fact that the gratuity is provided for under the PensionRules will not disentitle him to get the payment of gratuity under the
Payment of Gratuity Act. In view of the overriding provisions contained
in S. 14 of the Payment of Gratuity Act, the provision for gratuity
under Pension Rules will have no effect. Possibly for this reason, S. 5of the Payment of Gratuity Act has conferred authority on the
appropriate Government to exempt any establishment from the
operation of the provisions of the Act if in its opinion the employees of
such establishment are in receipt of gratuity or pensionary benefits
not less favourable than the benefits conferred under this Act.
Admittedly MCD has not taken any steps to invoke the power of the
Central Government under S. 5 of the Payment of Gratuity Act. In the
aforesaid premises we are of the considered opinion that theemployees of the MCD would be entitled to the payment of gratuity
under the Payment of Gratuity Act notwithstanding the fact that theprovisions of the Pension Rules have been made applicable to them for
the purpose of determining the pension. Needless to mention that theemployees cannot claim gratuity available `under Pension Rules.”
14. Though during the proceedings of the case, learned
counsel for the respondent-College also attempted to argue that since
respondent-college was a non-aided college, provisions contained
under the Act, shall not be applicable to it, but such plea being not
tenable, deserves outright rejection.
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15. Once Section 1 (3) (b), clearly provides that every shop or
.
establishment within the meaning of any law for the time being in
force in relation to shops and establishments in a State, in which ten
or more persons are employed, or were employed, on any day of the
preceding twelve months shall be governed by the Act, question of
respondent being non-aided might not have much relevance.
16. Section 2 (e) of the Act, which has been now amended in
the year 2009, as is evident from notification No. S-42013/1/95-SS-II,
dated 3.4.1997, clearly provides that all educational institutions shall
be covered under the Act. If it is so, argument advanced at the behest
of respondent-College, as detailed herein above, deserves outright
rejection, being totally fallacious and totally contrary to law.
17. Leaving everything aside, once there is no dispute that
ordinance/statute of Himachal Pradesh University specifically provides
for payment of gratuity, may be after fifteen years, coupled with the
fact that educational institution are also covered under the Act,
petitioners herein are entitled to be paid gratuity. As per Act, a person
after his /her having rendered five years service is entitled to gratuity,
whereas as per statute, minimum 15 years of service is required.
Since dispute is only with regard to length of service, provision
contained under the Act, especially with regard to length of service
being more beneficial to the petitioners ought to have been taken into
consideration by the respondent, while considering their claim for
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release of payment under the Act, especially when Section 14 of the
.
Act, clearly provides that provision contained under the Act shall have
overriding effect notwithstanding anything inconsistent therewith
contained in any enactments or rules made thereunder.
18. Hon’ble Apex Court in case titled Independent Schools’
Federation of India (REGD.) v. Union of India and Anr. 2022
LiveLaw (SC) 719, while upholding the constitutional validity of the
amendment to Section 2 (e) and insertion of Section 13 A, held that
amendment with retrospective effect is to make the benevolent
provisions equally applicable to teachers. Relevant paras of the afore
judgment reads as under:
“5. By Notification No. S-42013/1/95-SS.(II) issued by the Ministry of
Labour and Employment, Government of India on 3rd April, 1997, the
provisions of the PAG Act have been made applicable to theeducational institutions with ten or more employees. The private
schools being educational institutions, in which ten or more personsare employed, became liable to pay gratuity to their employees as per
the provisions of the PAG Act.
…
…
8. On 26th November 2007, the Payment of Gratuity (Amendment)
Bill, 2007, was introduced in the Parliament seeking to amend the
definition of the word “employee” and thereby rectify the error or
lacuna identified by this Court in Ahmedabad Private Primary
Teachers’ Association (supra). The object and reasons, as stated and
obvious, were to extend the benefit of gratuity to teachers of private
educational institutions. The bill was referred to the Standing
Committee on 10th December 2007. After due deliberations and in-
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depth consideration, the Standing Committee deemed it appropriate to
suggest changes vide the 26th Standing Committee Report. The.
report, on the aspect of grant of gratuity to teachers with effect from
3rd April, 1997 states:
“36…The Committee feel that implementing the law from the
year 2004 will cause irreparable loss to a large number ofteachers of the country, particularly to those who have already
retired. The Committee, therefore, call upon the Government to
make the law applicable with retrospective effect, i.e. from the
date of notification in the year 1997. This will provide the neededsuccour as well as justice to all those affected persons who were
denied their rightful benefits due to some technical flaw/legal
lacuna in the definition of the term ’employee’ as contained
in Section 2 (e) of the Payment of Gratuity Act, 1972.”
9. Accepting the said recommendation of the 26th Standing
Committee Report, the Payment of Gratuity (Amendment) Bill, 2009
was introduced in the Parliament on 24th February 2009 and was
passed on 31st December 2009. Clause (e) to Section 2 of the PAG Act
was amended with retrospective effect from 3rd April, 1997, and
reads:
“2. Definitions. –
xx xx xx
(e) “employee” means any person (other than an apprentice) who
is employed for wages, whether the terms of such employment
are express or implied, in any kind of work, manual orotherwise, in or in connection with the work of a factory, mine,
oilfield, plantation, port, railway company, shop or other
establishment to which this Act applies, but does not include
any such person who holds a post under the Central
Government or a State Government and is governed by any
other Act or by any rules providing for payment of gratuity;”
Further, Section 13A was inserted also with effect from 3rd April
1997 and reads :
“13A. Validation of payment of gratuity.- Notwithstanding
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court, for the period commencing on and from the 3rd day of
April, 1997 and ending on the day on which the Payment of.
Gratuity (Amendment) Act, 2009, receives the assent of the
President, the gratuity shall be payable to an employee in
pursuance of the notification of the Government of India in the
Ministry of Labour and Employment vide number S.O. 1080,dated the 3rd day of April, 1997 and the said notification shall
be valid and shall be deemed always to have been valid as if
the Payment of Gratuity (Amendment) Act, 2009 had been in
force at all material times and the gratuity shall be payableaccordingly:
Provided that nothing contained in this section shall extend, or
be construed to extend, to affect any person with any
punishment or penalty whatsoever by reason of the non-
rpayment by him of the gratuity during the period specified inthis section which shall become due in pursuance of the said
notification.”
10. The object and reasons for the Amendment Act, 2009 refers to the
judgment in Ahmedabad Private Primary Teachers’ Association 1997 1
SCC 326, and states that the legislature, to cover the definition of
“employee” to all kinds of employees, has used language similar to the
wide language of clause (f) of Section 2 of the Employees’ Provident
Funds and Miscellaneous Provisions Act, 1952. It is also crystal clear
that the Parliament has passed and enacted the Amendment Act,
2009 to confer, with retrospective effect from the date of the
notification on 3rd April 1997, benefit of gratuity to the teachers who
have rendered continuous service for not less than 5 years, on their
superannuation, retirement or resignation, or on their death or
disablement due to accident or disease.
…………..
22. A supplementary submission of the private schools was that the
judgments of this Court upholding retrospective amendments are
valid only when there is a tax implication as the Government has to
refund the paid taxes, is unfounded and irrational. The power to
amend, which includes the power to amend the statute with
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retrospective effect, is a constitutional power vested with the
legislature, which is not confined and restricted to any particular type
.
of statutes, namely, tax statutes. We would not accept any attempt to
circumscribe and limit the power vested with the sovereign legislature,
thereby putting fetters when such fetters are not prescribed by the
Constitution. When and which cases to exercise the power has to be
left to the legislature. In case the constitutional validity of the
amendment act is challenged, the court is entitled to examine the
relevant circumstances which prompted the legislature to make
retrospective amendment. Judicial review, when validity of an
amendment act is challenged, is decided on the grounds of lack of
legislative competence, violation of the fundamental rights or any
other provisions of the Constitution of India. In the present case, the
notification No. S-42013/1/95-SS.(II) dated 3rd April 1997 had
ensured that the benevolent provisions requiring payment of gratuity
should be extended to the “employees” of the educational institutions.
The amendment with retrospective effect is to make the benevolent
provisions equally applicable to teachers. The amendment seeks to
bring equality and give fair treatment to the teachers. It can hardly be
categorized as an arbitrary and high-handed exercise.
19. Consequently, in view of the detailed discussion made
herein above as well as law taken into consideration, this Court finds
merit in the present petition and accordingly, same is allowed.
Respondent-college is directed to release due and admissible gratuity
to the petitioners with statutory interest expeditiously, preferably,
within two months, failing which petitioners would be entitled to
interest @ 6% on the due amount from the date, amount ordered to be
paid, fell due, till the date of actual payment.
July 16, 2025 (Sandeep Sharma),
(manjit) Judge
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