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 - 2 - 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. - 3 - 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. - 4 - 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 - 5 - 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: - 6 - “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 than this 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. - 7 - 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, - (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 any employee 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 has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority 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 - 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 . [ 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 wages for 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 causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or 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 - 9 - 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 the provisions 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 Act being a special provision for payment of gratuity unless there is - 10 - 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 State Governments 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 Pension Rules 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. 5 of 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 the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees 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. - 11 - 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 - 12 - 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 the educational institutions with ten or more employees. The private schools being educational institutions, in which ten or more persons are 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- - 13 - 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 of teachers 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 needed succour 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 or otherwise, 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 anything contained in any judgement, decree or order of any - 14 - 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 payable accordingly: 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- payment by him of the gratuity during the period specified in this 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 - 15 - 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