E CAPS COMPUTERS INDIA PVT LTD V. DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL)

WA/707/2021

AI Insights

The case revolves around a dispute concerning the entitlement of gratuity to N. Santhosh, who was engaged by E E Caps Computers India Pvt Ltd as a sales consultant. The appellant contested the classification of Santhosh as an employee, arguing he was only a commission-based agent. The controlling authority under the Payment of Gratuity Act ruled in favor of Santhosh, directing the appellant to pay a specified gratuity amount, which was upheld by the appellate authority. The High Court's dismissal of the writ appeal by the appellant affirmed the lower authorities' decisions, recognizing Santhosh as an employee entitled to gratuity.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 726357 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-11-2021
• Assessment Year: misc
• Laws Referred To: Payment of Gratuity Act, 1972
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: S MANU
• Assessee Lawyers: ARUN VADAKKAN
• Keywords: Commission agent; Employee Status; Forged documents; Gratuity Claim; Payment of Gratuity
• Section: 18(1); 2(e); 7(7)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS & THE HONOURABLE MR.JUSTICE VIJU ABRAHAM THURSDAY, THE 18TH DAY OF NOVEMBER 2021 / 27TH KARTHIKA, 1943 WA NO. 707 OF 2021 AGAINST THE JUDGMENT DATED 02.02.2021 IN WP(C) 2668/2021 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: E E CAPS COMPUTERS INDIA PVT LTD,28/2966 A, NETAJI ROAD, KADAVANTHRA, KOCHI-682020, REPRESENTED BY ITS MANAGING DIRECTOR, K.GUNASEKHARAN, AGED 47 YEARS, S/O.T.M.KRISHNAN, 28/2966 A, NETAJI ROAD, KADAVANTHRA, KOCHI-682020 BY ADV ARUN MATHEW VADAKKAN RESPONDENTS: 1.DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL),KOCHI, APPELLATE AUTHORITY UNDER PAYMENT OF GRATUITY ACT, 1972, KAKKANAD, ERNAKULAM-682030 2. N.SANTHOSH, 20A, G1, KAVERI FLATS,MANIMEGALAI STREET, MADIPPAKKAM, CHENNAI-600091 OTHER PRESENT: SRI.S.MANU, ASGI THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 18.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A.No.707 of 2021 2 ALEXANDER THOMAS & VIJU ABRAHAM, JJ. ========================================= W.A.No.707 of 2021 [Arising out of the impugned judgment dated 2.2.2021 in W.P.(C).No.2668 of 2021 ] ========================================= Dated this the 18th day of November, 2021 JUDGMENT Viju Abraham, J. The above appeal is filed by the petitioner in the writ petition, aggrieved by the judgment dated 2.2.2021 in W.P.(C) No.2668 of 2021. 2. The Writ Petition was filed challenging Ext.P4 order dated 12.1.2021 issued by the appellate authority under the Payment of Gratuity Act 1972 in GA No.39/11/2019/B6 whereby Ext.P3 order dated 30.7.19 passed by the controlling authority under the Payment of Gratuity Act in Application No.48/(04)/2017/D1 was confirmed. The controlling authority by Ext.P3 order directed the appellant to pay an amount of Rs.2,42,308/- to the 2nd respondent towards gratuity amount together with simple interest at 10% from 1.7.2015. 3. It is contended that the appellant company is offering services in hardware technology and products to various businesses and individuals through channel partners and has its head office at W.A.No.707 of 2021 3 Coimbatore and 10 branches all over India with a branch office at Cochin. The 2nd respondent was engaged as a sales consultant on a commission basis and that he is not an employee of the company, either permanent or temporary, and that for each assignment the 2nd respondent was given a commission. The 2nd respondent was engaged for the said purpose at the Chennai Office in the year 2004 and in 2006 he ended the service with the company. It is averred by the appellant that in 2007, the 2nd respondent again approached the company and conveyed his willingness to work as a commission agent on piece work rate and the appellant company agreed to the said proposal. No appointment order or offer letter was issued to him and therefore, the 2nd respondent is not an employee or staff of the appellant company. It is further averred that from 2009 to 2015 an amount of Rs.24,41,000/- was paid to the 2nd respondent towards commission and the details of the same are enumerated in Ext.P1. Apart from that, the company had paid an amount of Rs.13,20,670/- towards incentives and other benefits. The 2nd respondent by taking advantage of the trust the company had in him, slowly interfered with the day-to-day affairs of the Cochin Branch of the company and even illegally appropriated an amount of Rs.66,000/- and when it W.A.No.707 of 2021 4 was detected he voluntarily made an apology before the company. Later, without any intimation, he ended the association with the company. 4. While so, the appellant received Ext.P2 notice dated 22.5.2017 from the controlling authority under the Payment of Gratuity Act on an application filed by the 2nd respondent praying for payment of gratuity amount due as per the Payment of Gratuity Act. Appellant entered appearance and contested the matter. It is the case of the appellant that the 2nd respondent was never an employee of the company, but he is only a commission agent and that his claim that he is a branch manager of the appellant company is not correct. No appointment order was ever issued in favour of the 2nd respondent. It is also contended that using the letterhead of the company, the 2nd respondent has forged a letter claimed to be a relieving order and produced the same before the controlling authority and that Form-16 document produced for supporting the claim that he is an employee of that company was also managed to be obtained from the company by fraudulent means. 5. After considering the rival contentions, the controlling authority under the Payment of Gratuity Act passed Ext.P3 order W.A.No.707 of 2021 5 dated 30.7.2009 whereby direction was issued to the appellant company to pay 2nd respondent an amount of Rs.2,42,308/- towards gratuity together with simple interest at 10% on that amount from the date on which the gratuity becomes payable, within 30 days from the date of receipt of a copy of the order. Aggrieved by Ext.P3 order issued by the controlling authority under the Payment of Gratuity Act, the appellant preferred an appeal before the appellate authority under Section 7(7) of the Payment of the Gratuity Act r/w Rule 18(1) of the Payment of Gratuity Rules. While preferring the appeal the appellant deposited the awarded amount with interest to the tune of Rs.3,47,000/-. It is contended that the appellate authority without looking into the merits of the case, dismissed the appeal as per Ext.P4 order dated 12.1.2021. It is aggrieved by Ext.P4 order issued by the appellate authority under the Payment of Gratuity Act that the petitioner preferred W.P.(C) No.2668 of 2021 challenging the same. The learned Single Judge on a consideration of the various contentions raised by the appellant entered a finding that no interference is called for as against Ext. P4 order passed by the appellate authority. It is aggrieved by the said judgment of the learned Single Judge dated 2.2.2001 in W.P.(C) No. 2668 of 2021, W.A.No.707 of 2021 6 this appeal has been filed. 6. We have heard Shri.Arun Mathew Vadakkan, the learned counsel appearing for the appellant and also Shri.S.Manu, the learned ASGI appearing for the 1st respondent and also gone through the pleadings in the appeal. 7. The case of the appellant is that the 2nd respondent was never an employee of the appellant company and he was engaged only as a sales consultant on a commission basis and that he will not come under the definition of an employee u/S.2(e) of the Payment of Gratuity Act. It is also contended that the controlling authority and the appellate authority went wrong in relying on the relieving letter and Form 16 for grant of relief in favour of the 2nd respondent and that the said contention raised by the appellant was not properly considered by the learned Single Judge while dismissing the writ petition. A perusal of Exts.P3 and P4 orders will show that the specific contention of the 2nd respondent is that he was an employee of the appellant company and was working as a Branch Manager and that he had rendered continuous service of 12 years from April 2003 to 13.6.2015 as an employee of the appellant company. Ext.A3, a copy of the bank details has been produced by the 2nd respondent to W.A.No.707 of 2021 7 prove the contention that the company used to credit the salary every month to his bank account. He further contended that salary amount is regularly credited to his account and the amount of salary was periodically increased and the last drawn salary is Rs.35,000/-. It was the further contention of the 2nd respondent that he joined the opposite party in 2003 and it was in the financial year 2006-2007, earning from salary came under the income tax slab. Income tax returns have been filed every year wherein the name of the employer is clearly and specifically mentioned as 'Ecaps Computers India Pvt Ltd.', the appellant herein and to prove the same income tax return was produced and marked as Ext.A4 before the controlling authority. In Form-16 also, which is produced as Ext.A5, it is the appellant who was duly authorised to make the deduction at source as the employer. The 2nd respondent also produced Ext.A1 relieving certificate dated 30.6.2015 issued by the appellant wherein it is stated that the 2nd respondent is designated as Branch Manager, Cochin Branch, drawing Rs.35,000/- as salary. To further prove the factum of issuance of relieving certificate by the appellant the 2nd respondent also produced a copy of the e-mail which is marked as Ext.A2 in the proceedings before the controlling authority which contained an W.A.No.707 of 2021 8 attachment of a scanned copy of the relieving order issued to him by the appellant. 8. Even though, it was contended by the appellant before the said authorities under the Payment of Gratuity Act that the 2nd respondent was never an employee of the company and that he was only a sales consultant on a commission basis, no evidence was produced before the authority to prove that the 2nd respondent was only engaged as a commission agent and not as an employee. Though it was further contended that the relieving order was a forged one and that Form-16 under the Income Tax Act was procured by the 2nd respondent by fraudulent means, the appellant did not produce any evidence to prove that any action was initiated against the 2nd respondent for such fraudulent activities. On the contrary, sufficient evidence was adduced by the 2nd respondent by producing and marking Exhibits A1 to A5 to prove that he is an employee of the appellant company and that he is entitled to receive gratuity from the appellant company under the Payment of Gratuity Act,1972. 9. On a consideration of all these relevant aspects as stated above, we concur with the finding of the learned Single Judge that there is no reason to interfere with Ext.P4 order issued by the W.A.No.707 of 2021 9 appellate authority. The Writ Appeal lacks merit, and the same is accordingly, dismissed. sd/- ALEXANDER THOMAS, JUDGE sd/- VIJU ABRAHAM, JUDGE pm "