The Supreme Court will examine who is liable to pay the gratuity of employees of Government Aided Schools, as per the Payment of Gratuity Act. The issue came up in an SLP filed against a Madhya Pradesh HC judgment.
While issuing notice in the SLP, the Bench noted that there are contrary views of Chhattisgarh HC and Madhya Pradesh HC on the issue of who is liable to pay gratuity for government-aided schools under the Act.
In the impugned judgement, the Madhya Pradesh High Court held that the institution has to pay the gratuity and not the State. To arrive at this conclusion, the Court relied on Suresh Kumar Dwivedi vs State of MP where a Division Bench observed that the State government does not appoint teachers of aided schools. There is no master-servant relationship between teachers and the State Government.
The Payment of Gratuity Act has no provision for payment of such benefits. It is not clear how the State Government is liable/accountable to extend such benefits, remarked the Bench. The Court further observed that as it is a policy involving financial burden, the Court cannot compel the government to give the sanction.
On the other hand in Ambika Mission Boys Middle School vs the State of Chhattisgarh, the Chhattisgarh High Court ruled that State is the employer (as defined in Payments of Gratuity Act) of employees/teachers of aided institutions.
Title: Gujrati Samaj vs the State of MP
Case No.: SLP No.: 15331 of 2020
Date of Order:18.01.2021
Coram: Hon’ble Justice Sanjay Kishan Kaul, Hon’ble Justice Dinesh Maheshwari and Hon’ble Justice Hrishikesh Roy