Birla Institute of Technology v. The State of Jharkhand

By FG LawKit

Birla Institute of Technology (BIT), a technical educational institute, was the appellant (employer).
Respondent No.4 joined BIT as an Assistant Professor in 1971 and superannuated in 2001.
Respondent No.4 requested payment of the gratuity amount under the Payment of Gratuity Act, 1972.
The appellant declined the payment. Respondent No.4 successfully filed an application for the gratuity amount, which was allowed by the Controlling Authority, directing BIT to pay Rs.3,38,796/- along with interest at a rate of 10% p.a.
The appellant lost the case through all stages, including the Appellate Authority, the Single Judge, and the Division Bench of the High Court.
This appeal was filed against the final judgment and order of the Division Bench of the High Court of Jharkhand at Ranchi.

Whether the Courts below were justified in holding that Respondent No.4 (teacher) was entitled to claim the gratuity amount from the appellant (employer) under the Act.

The apex court ruled that the writ petition challenging the constitutional validity of Amending Act No. 47 of 2009, though pending, does not affect the right of Respondent No.4 (teacher) to claim gratuity from the employer.
The court found no merit in the appeal and dismissed it with costs of Rs.25,000/- payable by the appellant to Respondent No.4.
The appeal was dismissed, and the orders directing the appellant to pay gratuity were upheld.

The Court noted that an error apparent on the face of the record (an apparent error) occurred because a material, subsequent event—the amendment made in the Payment of Gratuity Act—was not brought to their notice at the time of hearing a previous order.
In light of the amendment, reliance placed by the appellant (employer) on the decision of Ahmedabad Pvt. Primary Teachers Association (supra) is wholly misplaced and does not help the appellant in any manner. It has lost its binding effect.

Post-Amendment Benefit: The post-amendment benefit of the Act was extended to teachers, thereby bringing them within the purview of the definition of "employee." Teachers are now held entitled to claim the amount of gratuity under the Act from their employer.
Pre-Amendment Position: Prior to the amendment, a teacher was not considered an employee within the meaning of the expression "employee" as defined under Section 2(e) of the Act, and as such was not entitled to claim gratuity. The High Court erred in making a distinction between teachers working in primary schools and teachers working in other educational institutions when the Act clearly did not cover teachers by the definition of "employee" at that time.