SRINAGAR: The High Court of Jammu Kashmir and Ladakh has allowed the Jammu and Kashmir Road Transport Corporation (JKSRTC) to pursue the statutory remedy of appeal against orders directing payment of gratuity to four retired employees, while at the same time setting aside adverse observations made earlier by the writ court against the Corporation.
A Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar passed the judgment in Letters Patent Appeal (LPA No. 172/2024) filed by the Corporation against the judgment dated April 23, 2024, passed in OWP No. 1741/2018. The judgment was reserved on May 20 and pronounced on May 30.
The Corporation was represented by advocate Shakir Haqani, while advocate Zahoor Jan appeared for the respondents.
The case arose out of claims filed by four retired drivers of the Corporation before the Controlling Authority under the Payment of Gratuity Act, 1972, alleging that substantial portions of their gratuity dues had remained unpaid despite retirement. The retired employees — Mohd Sidiq Bhat, Abdul Gani Wani, Mohd Ashraf Khan and Abdul Aziz Dar — had approached the Authority seeking release of the balance gratuity amount along with interest.
Before the Authority, the Corporation had pleaded that it was passing through severe financial distress and had been suffering continuous losses, making it difficult to discharge its financial liabilities. However, the entitlement of the retired employees to gratuity was not disputed.
After considering the matter, the Controlling Authority directed the Corporation to release the balance gratuity amounts along with interest at the rate of nine percent per annum from May 1, 2012 till actual payment. The Authority also initiated recovery proceedings after the dues remained unpaid.
Instead of filing a statutory appeal under Section 7 of the Payment of Gratuity Act, the Corporation filed review petitions before the Controlling Authority itself. Those review petitions were dismissed in August 2018, by which time the limitation period prescribed for filing appeals had already expired.
The Corporation thereafter approached the High Court through a writ petition challenging both the gratuity awards and the recovery proceedings. It argued that the gratuity calculations had been wrongly made on the basis of Dearness Allowance (DA), whereas employees of the Corporation were governed by the Cost-of-Living Allowance (COLA) system.
The writ court, however, dismissed the petition with costs of Rs 40,000, holding that the Corporation had failed to avail the alternate statutory remedy available under the law and had instead attempted to bypass the limitation period by pursuing an impermissible review remedy. The writ court had also observed that the conduct of the Corporation lacked bona fides and amounted to an attempt to obstruct the due administration of justice.
Hearing the appeal, the Division Bench observed that there could be no dispute regarding the settled legal position that writ jurisdiction ordinarily ought not to be exercised where an efficacious alternate remedy is available under a statute.
The Bench noted that the issue raised by the Corporation regarding applicability of DA or COLA while calculating gratuity did not involve a question of jurisdiction but was a matter which could properly be examined by the appellate authority under the Payment of Gratuity Act.
Referring to an earlier judgment of the High Court in JK State Road Transport Corporation vs Nazir Ahmad Mir, the court reiterated that the Controlling Authority was competent to determine gratuity payable under the Act and that disputes relating to the calculation of gratuity were required to be agitated through the statutory appellate mechanism.
At the same time, the Division Bench found that the writ court ought not to have made adverse remarks against the Corporation regarding alleged misrepresentation or deliberate misconduct.
The court observed that merely because the Corporation had filed review petitions before the Controlling Authority did not necessarily establish mala fides or an intention to mislead the court. It said the Corporation may have acted on incorrect legal advice without properly appreciating that the Controlling Authority had no power to review its own orders.
The Bench further observed that once the writ court had concluded that the petition itself was not maintainable because of the alternate remedy available under the statute, it ought to have relegated the parties to the appellate forum instead of making observations which could prejudice either side in future proceedings.
Allowing the appeal, the Division Bench set aside the judgment of the writ court and dismissed the writ petition while granting liberty to the Corporation to file statutory appeals before the competent appellate authority under the Payment of Gratuity Act.
The court also directed that the period spent by the Corporation in pursuing the review proceedings and the writ petition would be excluded while computing limitation for filing the appeals. The Bench clarified that none of the observations made in the judgment would prejudice the rights of the parties before the appellate authority.
