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Issues involved: Appeal against the judgment and order of the High Court of Punjab & Haryana refusing to quash an order u/s 33-C(2) of the Industrial Disputes Act, 1947 for payment of gratuity to the respondents u/s the Payment of Gratuity Act, 1972.
Issue 1 - Applicability of Payment of Gratuity Act, 1972: The State of Punjab contended that the Payment of Gratuity Act, 1972 cannot be invoked by the respondents as the Project does not fall within the scope of Section 1(3) of that Act. The Labour Court held that the Project is an establishment within the meaning of the Payment of Wages Act, and thus, the Payment of Gratuity Act applies to it. The Supreme Court agreed, stating that the Payment of Gratuity Act applies to establishments involved in construction, development, maintenance, or operations related to various activities, including electricity generation. Issue 2 - Entitlement to Gratuity on Retrenchment: The appellant argued that retrenchment does not fall within section 4(1) of the Payment of Gratuity Act, which specifies when gratuity is payable. The Court interpreted the definition of "retirement" under the Act broadly, stating that any termination of service, including retrenchment, falls within the scope of section 4(1) entitling employees to gratuity. Issue 3 - Jurisdiction under Industrial Disputes Act: The appellant contended that the employee respondents should have applied under the provisions of the Payment of Gratuity Act instead of u/s 33-C(2) of the Industrial Disputes Act. The Court held that the Payment of Gratuity Act is a self-contained code for gratuity payment, and proceedings must be taken under that Act. Therefore, the Labour Court had no jurisdiction to entertain the applications filed u/s 33-C(2) of the Industrial Disputes Act. The appeal was allowed, quashing the Labour Court's order, and the appellant was directed to pay the employee respondents their costs and the due amounts under the Payment of Gratuity Act within one month.
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