Page 127 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes 4. Such other establishments or class of establishments in which 10 or more employees are
employed or were employed on any day of the preceding 12 months, as the Central Government
may, by notification, specify in this behalf.
A shop or establishment once covered shall continue to be covered notwithstanding that the
number of persons employed therein at any time falls below 10.

Notes In exercise of the powers conferred by clause (c), the Central Government has
specified Motor transport undertakings, Clubs, Chambers of Commerce and Industry,
Inland Water Transport establishments, Solicitors offices, Local bodies, Educational
Institutions, Societies, Trusts and Circus industry, in which 10 or more persons are employed
or were employed on any day of the preceding 12 months, as classes of establishments to
which the Act shall apply.



Caselet Karnataka State Road Transport Corporation,
Bangalore Rural Division, Bangalore vs. The Deputy
Labour Commissioner and The Appellate Authority,

he 3rd Respondent an employee of the Petitioner- Road Transport Corporation on
attaining the age of superannuation on 30.4.2005, was entitled to gratuity by
Tcomputing the quantum either in terms of the KSRTC Servants Gratuity Regulations,
for short Regulations or the Payment of Gratuity Act, 1972, for short Act, whichever is
beneficial. Petitioner reckoned 27 years and 6 months as the period of continuous service,
by excluding 7 years, 3 months and 22 days from out of 34 years, 9 months and 29 days,
alleging absence, leave without salary, suspension and others and accordingly, computed
1,70,500/- as gratuity, in terms of the Regulations, from out of which was deducted
54,350/- on the premise that the 3rd Respondent was liable to pay towards discharge of
a loan extended by the State Bank of Mysore, HSR Layout, while in service. The 3rd
Respondent aggrieved by the exclusion of the period of service and the deduction towards
discharge of loan, filed an application under Rule 10 of the Payment of Gratuity (Central)
Rules, 1972, before the 2nd Respondent- Controlling Authority. In the appeal, the Petitioner
contended that 7 years, 3 months and 22 days being the break in service and not ‘continuous
service’ within the definition of the said term under Section 2(A) of the Act deserves
exclusion for computation of gratuity, since the 3rd Respondent was absent, suffered
orders of leave without salary, suspension and others while in service. It is next contended
that the 3rd Respondent having not discharged the debt due to State Bank of Mysore, hence
the deduction of 54,350/- The Court observed that the requirement of Section 2(A) of the
Act in order to establish interrupted service so as to treat it as break in service is the orders
passed in that regard treating the period of absence as break in service, in accordance with
the standing orders, rules or regulations governing the employees of the establishment.
In the instant case, there is not a title of evidence to establish orders passed by the Authorities
treating as break-in-service the period of suspension, leave without salary, absence from
service and others, since mere absence, per se, is not break-in service, breach falling
within the definition of the term ‘continuity of service’ under the Act. In that view of the
Contd....

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