BIRLA INSTITUTE OF TECHNOLOGYversusTHE STATE OF JHARKHAND & ORS.

                         [2019] 1 S.C.R. 301                             301


             BIRLA INSTITUTE OF TECHNOLOGY                               A
                                  v.
             THE STATE OF JHARKHAND & ORS.
                   (Civil Appeal No. 2530 of 2012)
                        JANUARY 07, 2019                                 B
[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]
       Payment of Gratuity Act, 1972 – s.2(e) – Employee – Appellant
is a premier technical educational institute of repute in the country
– Respondent no.4 joined the appellant-Institute as Assistant
                                                                         C
Professor and on superannuation claimed gratuity – Entitlement of
respondent no.4 to gratuity – Held: The issue involved in the instant
appeal is no longer res integra and was decided in Ahmadabad Pvt.
Primary Teachers Association, wherein it was held that since a teacher
is not an employee under s.2(e) of the Act, he has no right to invoke
the provisions of the Act for claiming gratuity under the Act from       D
his/her employer – In view of this principle of law, respondent No.4,
who was also a teacher and worked with the appellant as such,
was not eligible to claim gratuity amount from the appellant under
the Act.
      Allowing the appeal, the Court                                     E
       HELD: 1. The question that had arisen for consideration
in the case of Ahmadabad Pvt. Primary Teachers Association was
as to whether “Teacher” could be regarded as an “employee”
under Section 2(e) of the Act and, if so, whether he/she is entitled
to claim gratuity amount from his employer in accordance with            F
the provisions of the Act. The two-Judge Bench examined this
question in detail. Justice D.M. Dharmadhikari speaking for the
Bench held that a teacher is not an employee within the meaning
of the expression “employee” as defined under Section 2(e) of
the Act and hence he/she is not entitled to claim any gratuity
amount from his employer under the Act. Reading this principle           G
of law laid down by this Court, respondent No.4, who was also a
teacher and worked with the appellant as such, was not eligible
to claim gratuity amount from the appellant (BIT) under the Act.
[Paras 12, 13, 14 and 16][304-C-E; 308-A-B]
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302            SUPREME COURT REPORTS                         [2019] 1 S.C.R.


A           Ahmadabad Pvt. Primary Teachers Association v.
            Administrative Officer and Others (2004) 1 SCC 755 :
            [2004] 1 SCR 470 – relied on.
            2. The High Court though took note of the decision
      rendered in the case of Ahmadabad Pvt. Primary Teachers
B     Association but erred in distinguishing it on the ground that it is
      applicable only to the primary teachers working in primary schools
      and since the case at hand is not a case of a primary teacher, it
      has no application to this case. The High Court failed to see that
      this Court had examined the expression “teacher” qua the
      expression “employee” defined in Section 2(e) of the Act and
C     then held that “teacher” is not an employee within the meaning
      of Section 2(e) of the Act. While laying down the law, this 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 entitlement to claim
D     the gratuity under the Act. The view taken by the High Court
      was not in conformity with the law laid down by this Court in the
      case of Ahmadabad Pvt. Primary Teachers Association. It was based
      on incorrect reading of this Court’s decision and, therefore, it
      deserves to be set aside [Paras 17, 19, 20][308-B-C, E-F]
                               Case Law Reference
E
            [2004] 1 SCR 470                   relied on        Para 12
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2530
      of 2012.
            From the Judgment and Order dated 02.04.2008 of the High Court
      of Jharkhand at Ranchi in LPA No. 53 of 2007.
F
            Shambo Nandy, Ms. N. Annapoorani Advs. for the appellant.
            Anil Kumar Jha, Sunil Roy, Advs. for the respondents.
            The Judgment of the Court was delivered by
            ABHAY MANOHAR SAPRE, J. 1. This appeal is directed
G     against the final judgment and order dated 02.04.2008 passed by the
      High Court of Jharkhand at Ranchi in LPA No.53 of 2007 whereby the
      Division Bench of the High Court dismissed the LPA filed by the appellant
      herein and confirmed the order dated 12.01.2007 passed by the Single
      Judge of the High Court in W.P. No.2572 of 2005.

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    BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                              303
        JHARKHAND [ABHAY MANOHAR SAPRE, J.]

      2. The controversy involved in this appeal is a short one as would       A
be clear from the facts stated infra.
      3. The appellant is a premier technical educational institute of
repute in the country. It is known as “Birla Institute of Technology”
(BIT).
      4. Respondent No.4 joined the appellant-Institute as Assistant           B
Professor on 16.09.1971 and superannuated on 30.11.2001 after attaining
the age of superannuation.
      5. Respondent No.4 then made a representation to the appellant
and prayed therein for payment of gratuity amount which, according to
respondent, was payable to him by the appellant under the Payment of           C
Gratuity Act, 1972 (for short called “The Act”). The appellant, however,
declined to pay the amount of gratuity as demanded by respondent No.4.
      6. Respondent No.4, therefore, filed an application before the
controlling authority under the Act against the appellant and claimed the
amount of gratuity which, according to him, was payable to him under           D
the Act.
      7. By order dated 07.09.2002, the controlling authority (respondent
No.3) allowed the application filed by respondent No.4 and directed the
appellant to pay a sum of Rs.3,38,796/- along with interest at the rate of
10% p.a. towards the gratuity to respondent No.4.                              E
       8. The appellant felt aggrieved and filed appeal before the appellate
authority under the Act. By order dated 15.04.2005, the appellate authority
dismissed the appeal. The appellant felt aggrieved and carried the matter
to the High Court in a writ petition. The High Court (Single Judge) by
order dated 12.01.2007 dismissed the writ petition and upheld the orders       F
of the authorities passed under the Act. The appellant then filed Letters
Patent Appeal before the Division Bench against the order passed by
the Single Judge. The LPA was also dismissed by the impugned order
which has given rise to filing of the present appeal by way of special
leave by the appellant-Institute in this Court.
                                                                               G
      9. The short question, which arises for consideration in this appeal,
is whether the Courts below were justified in holding that respondent
No.4 was entitled to claim gratuity amount from the appellant (employer)
under the Act.
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304            SUPREME COURT REPORTS                          [2019] 1 S.C.R.


A           10. Heard Mr. Shambo Nandy, learned counsel for the appellant
      and Mr. Anil Kumar Jha, learned counsel for respondent Nos.1-3 and
      Mr. Sunil Roy, learned counsel for respondent No.4.
             11. Having heard the learned counsel for the parties and on perusal
      of the record of the case, we find merit in this appeal.
B            12. As rightly argued by the learned counsel for the appellant, the
      issue involved in this appeal remains no longer res integra and is decided
      by this Court in Ahmadabad Pvt. Primary Teachers Association vs.
      Administrative Officer and Others (2004) 1 SCC 755 in favour of
      the appellant.
C           13. The question arose for consideration in the case of
      Ahmadabad Pvt. Primary Teachers Association (supra) as to whether
      “Teacher” could be regarded as an “employee” under Section 2(e) of
      the Act and, if so, whether he/she is entitled to claim gratuity amount
      from his employer in accordance with the provisions of the Act.
D            14. The two-Judge Bench examined this question in detail. Justice
      D.M. Dharmadhikari speaking for the Bench held that a teacher is not
      an employee within the meaning of the expression “employee” as defined
      under Section 2(e) of the Act and hence he/she is not entitled to claim
      any gratuity amount from his employer under the Act. In other words, it
E     was held that since a teacher is not an employee under Section 2(e) of
      the Act, he has no right to invoke the provisions of the Act for claiming
      gratuity under the Act from his/her employer.
            15. It is apposite to quote the reasoning of Their Lordships in
      paras 20 to 26 of the judgment which reads as under:
F           “20. An educational institution, therefore, is an
            “establishment” notified under Section 1(3)(c) of the
            Payment of Gratuity Act, 1972. On behalf of the Municipal
            Corporation, it is contended that the only beneficial effect
            of the notification issued under Section 1(3)(c) of the Act of
            1972, is that such non-teaching staff of educational
G
            institutions as answer the description of any of the
            employments contained in the definition clause 2(e), would
            be covered by the provisions of the Act. The teaching staff
            being not covered by the definition of “employee” can get
            no advantage merely because by notification “educational
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BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                     305
    JHARKHAND [ABHAY MANOHAR SAPRE, J.]

 institutions” as establishments are covered by the               A
 provisions of the Act.
 21. Having thus compared the various definition clauses of
 the word “employee” in different enactments, with due
 regard to the different aims and objects of the various labour
 legislations, we are of the view that even on plain              B
 construction of the words and expression used in the
 definition clause 2(e) of the Act, “teachers” who are mainly
 employed for imparting education are not intended to be
 covered for extending gratuity benefits under the Act.
 Teachers do not answer description of being employees
 who are “skilled”, “semi-skilled” or “unskilled”. These          C
 three words used in association with each other intend to
 convey that a person who is “unskilled” is one who is not
 “skilled” and a person who is “semi-skilled” may be one
 who falls between the two categories, meaning he is neither
 fully skilled nor unskilled. The Black’s Law Dictionary          D
 defines these three words as under:
    “Semi-skilled work.—Work that may require some
    alertness and close attention, such as inspecting items
    or machinery for irregularities, or guarding property or
    people against loss or injury.                                E
    Skilled work.—Work requiring the worker to use
    judgment, deal with the public, analyze facts and figures,
    or work with abstract ideas at a high level of complexity.
    Unskilled work.—Work requiring little or no judgment,
    and involving simple tasks that can be learned quickly        F
    on the job.”
 22. In construing the abovementioned three words which
 are used in association with each other, the rule of
 construction noscitur a sociis may be applied. The meaning
 of each of these words is to be understood by the company        G
 it keeps. It is a legitimate rule of construction to construe
 words in an Act of Parliament with reference to words found
 in immediate connection with them. The actual order of
 these three words in juxtaposition indicates that meaning
 of one takes colour from the other. The rule is explained
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306     SUPREME COURT REPORTS                        [2019] 1 S.C.R.


A     differently: “that meaning of doubtful words may be
      ascertained by reference to the meaning of words associated
      with it”. [See Principles of Statutory Interpretation by Justice
      G.P. Singh, 8th Edn., Syn. 8, at p. 379.]
      23. The word “unskilled” is opposite of the word “skilled”
B     and the word “semi-skilled” seems to describe a person
      who falls between the two categories i.e. he is not fully
      skilled and also is not completely unskilled but has some
      amount of skill for the work for which he is employed. The
      word “unskilled” cannot, therefore, be understood
      dissociated from the word “skilled” and “semi-skilled” to
C     read and construe it to include in it all categories of
      employees irrespective of the nature of employment. If the
      legislature intended to cover all categories of employees
      for extending benefit of gratuity under the Act, specific
      mention of categories of employment in the definition clause
D     was not necessary at all. Any construction of definition
      clause which renders it superfluous or otiose has to be
      avoided.
      24. The contention advanced that teachers should be
      treated as included in the expression “unskilled” or
E     “skilled” cannot, therefore, be accepted. The teachers
      might have been imparted training for teaching or there
      may be cases where teachers who are employed in primary
      schools are untrained. A trained teacher is not described
      in the industrial field or service jurisprudence as a “skilled
      employee”. Such adjective generally is used for an employee
F     doing manual or technical work. Similarly, the words “semi-
      skilled” and “unskilled” are not understood in educational
      establishments as describing nature of job of untrained
      teachers. We do not attach much importance to the
      arguments advanced on the question as to whether
G     “skilled”, “semi-skilled” and “unskilled” qualify the words
      “manual”, “supervisory”, “technical” or “clerical” or the
      above words qualify the word “work”. Even if all the words
      are read disjunctively or in any other manner, trained or
      untrained teachers do not plainly answer any of the
      descriptions of the nature of various employments given in
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BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                      307
    JHARKHAND [ABHAY MANOHAR SAPRE, J.]

 the definition clause. Trained or untrained teachers are not      A
 “skilled”, “semi-skilled”, “unskilled”, “manual”,
 “supervisory”, “technical” or “clerical” employees. They
 are also not employed in “managerial” or “administrative”
 capacity. Occasionally, even if they do some administrative
 work as part of their duty with teaching, since their main
                                                                   B
 job is imparting education, they cannot be held employed
 in “managerial” or “administrative” capacity. The teachers
 are clearly not intended to be covered by the definition of
 “employee”.
 25. The legislature was alive to various kinds of definitions
 of the word “employee” contained in various previous              C
 labour enactments when the Act was passed in 1972. If it
 intended to cover in the definition of “employee” all kinds
 of employees, it could have as well used such wide language
 as is contained in Section 2(f) of the Employees’ Provident
 Funds Act, 1952 which defines “employee” to mean “any             D
 person who is employed for wages in any kind of work,
 manual or otherwise, in or in connection with the work of
 an establishment …”. Non-use of such wide language in
 the definition of “employee” in Section 2(e) of the Act of
 1972 reinforces our conclusion that teachers are clearly
 not covered in the definition.                                    E

 26. Our conclusion should not be misunderstood that
 teachers although engaged in a very noble profession of
 educating our young generation should not be given any
 gratuity benefit. There are already in several States separate
 statutes, rules and regulations granting gratuity benefits        F
 to teachers in educational institutions which are more or
 less beneficial than the gratuity benefits provided under
 the Act. It is for the legislature to take cognizance of
 situation of such teachers in various establishments where
 gratuity benefits are not available and think of a separate       G
 legislation for them in this regard. That is the subject-matter
 solely of the legislature to consider and decide.”
                                   (emphasis supplied)


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308            SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A            16. Reading the aforementioned principle of law laid down by this
      Court, we have no hesitation in holding that respondent No.4, who was
      also a teacher and worked with the appellant as such, was not eligible to
      claim gratuity amount from the appellant (BIT) under the Act.
            17. In our opinion, the High Court though took note of the decision
B     rendered in the case of Ahmadabad Pvt. Primary Teachers
      Association (supra) but erred in distinguishing it on the ground that it is
      applicable only to the primary teachers working in primary schools and
      since the case at hand is not a case of a primary teacher, it has no
      application to this case.
C            18. In our view, the High Court failed to read last line of Para 24
      quoted above wherein this Court has held in clear terms that “teachers”
      are clearly not intended to be covered by the definition of
      “employee”. The High Court was, therefore, not justified in making a
      distinction between the “teachers working in the primary schools” and
      the “teachers working in other educational institutions”.
D
             19. In other words, the High Court failed to see that this Court
      had examined the expression “teacher” qua the expression “employee”
      defined in Section 2(e) of the Act and then held that “teacher” is not an
      employee within the meaning of Section 2(e) of the Act. While laying
      down the law, this Court did not make any distinction between the teachers
E     inter se and nor made any distinction as to in which type of educational
      institute the teacher is working for determining his entitlement to claim
      the gratuity under the Act.
            20. We cannot, therefore, concur with the view taken by the High
      Court, which in our view, is not in conformity with the law laid down by
F     this Court in the case of Ahmadabad Pvt. Primary Teachers
      Association (supra). It is based on incorrect reading of this Court’s
      decision and, therefore, it deserves to be set aside.
            21. We, however, make it clear that we have examined the case
      at hand only in the light of the provisions of the Act, which were akin to
G     the facts of the case in Ahmadabad Pvt. Primary Teachers
      Association (supra).
             22. In case there is any other State Act or Scheme in force, which
      extends any benefit to the employees of the Institute only then respondent
      No.4 would be at liberty to take benefit of such Act/Scheme in accordance
H     with law.
    BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                             309
        JHARKHAND [ABHAY MANOHAR SAPRE, J.]

       23. As a result, the appeal succeeds and is accordingly allowed.       A
The impugned order is set aside. As a consequence, the application made
by respondent No.4 before the controlling authority under the Act against
the appellant is dismissed as not maintainable.

Devika Gujral                                               Appeal allowed.   B




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