V.M. Syam Kumar, J.

1. These appeals arise from a common judgment dated 13.03.2024 rendered by the learned Single Judge in W.P.(C) Nos.37503, 35649, and 36325 of 2022. Appellants were the petitioners in the respective Writ Petitions. Since common questions arise for consideration in these Writ Appeals, they are heard and disposed of together. W.A.No.951 of 2024 is treated as the lead case for easy reference to the facts and exhibits.

2. Appellants, who are retired abkari workers of the 1st respondent Kerala State Beverages (M&M) Corporation Ltd., had filed the Writ Petitions airing their common grievance that the 1st respondent Corporation had declined them gratuity payable under the Payment of Gratuity Act, 1972 (hereinafter referred to as “the Gratuity Act”), for the purported reason that terminal benefits were already being paid to them by the 3rd respondent, viz., Kerala Abkari Workers Welfare Fund Board (KAWWF). The following prayers were sought in the Writ Petitions:

                            “(i) issue a writ of mandamus directing respondents 1 and 2 to pay gratuity to all the petitioners herein as eligible under Rule 76 of the Service Rules of the Corporation, forthwith;

                            (ii) issue a writ of mandamus or appropriate writ or order declaring that abkari workers are entitled to get gratuity under the Payment of Gratuity Act and under Rule 76 of the Service Rules of the 1st respondent Corporation;

                            (iii) Dispense with filing of the translation of vernacular documents produced by the petitioner in this case; and (iv) such other reliefs as this Hon’ble Court deems fit and proper in the facts and circumstances of the case”

3. The learned Single Judge dismissed the W.P.(C)s inter alia holding that if the contentions of the appellants are accepted, the same would amount to double payment of gratuity, i.e., one under the Welfare Fund and the other under the Gratuity Act, thus leading to unlawful enrichment. Aggrieved by the said dismissal of their Writ Petitions, the appellants are before us in appeal.

4. Heard Sri. Deepu Thankan, Advocate on behalf of the appellants, Sri. Naveen T., Advocate, Standing Counsel for respondents 1 and 2 and Sri.S.Krishnanmoorthy, Advocate for the 3rd respondent.

5. The learned counsel for the appellants submits that the impugned judgment is not sustainable for multiple reasons. The conclusion drawn by the learned Single Judge that an employee governed by any other Act or Rules providing for payment of gratuity is not an ‘employee’ within the definition of the Gratuity Act is erroneous. Reliance is placed on the definition of ‘employee’ under Section 2(e) of the Gratuity Act, and it is contended that the exclusion applies only to persons who hold a post under the Central Government or State Government and are governed by any other Act or Rules providing for payment of gratuity. It is submitted that it is clear from the said definition that an employee under the respondent Corporation would not be excluded from the ambit of the said term and would undoubtedly come within the meaning of the term employee under the Gratuity Act, as the respondent Corporation cannot be subsumed within the words Central Government or State Government.

6. Relying on Section 14 of the Gratuity Act, it is submitted that the said provision lends an overriding effect to the Act over any other inconsistent provision in any other enactment. Merely for the reason that the employees of the 1strespondent Corporation, like the appellants, received benefits under the Kerala Abkari Workers Welfare Fund Act (hereinafter referred to as 'the KAWWF Act'), the same will not by itself disentitle them from getting the benefits under a central statute.

7. Gratuity, it is submitted, is a statutory right of the appellants, which cannot be taken away except in accordance with the provisions of the Gratuity Act. Section 5 of the said Act empowers the appropriate Government to exempt an establishment from the purview of the Act, if the employees therein receive gratuity and pension benefits not less favourable than the benefits conferred under the Act. Unless such an exemption is expressly issued/ ordered by the appropriate Government, gratuity which is a statutory right and entitlement cannot be denied. The benefits under the other enactments, for instance, the KAWWF Act, which may confer some advantage to the appellants, cannot be stated as a disentitlement to claim gratuity. The learned Single Judge overlooked the said aspect while rendering the impugned judgment.

8. It is submitted that all the employees of the Corporation are entitled to gratuity under the Gratuity Act, and the 1st respondent had taken a unilateral stand that the gratuity under the Gratuity Act applies only to regular employees and not to abkari workers who are governed by the KAWWF Act. The said stand taken by the 1st respondent, without comparing the benefits under the respective enactments, is arbitrary and unsustainable, and the classification made by the learned Single Judge based thereon, it is submitted, is violative of the provisions of the Gratuity Act and unsustainable in law. Reliance is placed on the precedents laid down by the Hon’ble Supreme Court and this Court to buttress the contentions put forth. The learned counsel thus prays that the impugned judgment may be set aside and the prayers in the Writ Appeal may be allowed.

9. Per contra, the learned counsel appearing for the 1st respondent submits that the judgment of the learned Single Judge does not require any interference as the same has been rendered validly and in accordance with law. The provisions of the Gratuity Act are not applicable to the abkari workers working in the respondent corporation, and their gratuity and allied benefits are governed by the provisions contained in the KAWWF Act. Being members of the Board, they are entitled to receive benefits, including continuation of service up to 60 years. The KAWWF Act had been enacted with the object of providing social security to abkari workers, and as per Section 3 of the said Act, the fund is to be utilised for various purposes, including payment of gratuity, payment of pension, payment of provident fund, family pension etc. As per the Kerala Abkari Workers Welfare Fund Scheme, 1990, an eligible employee is entitled to gratuity benefits under clause 36 of the scheme. This effectively disentitles the appellants from claiming gratuity under the Gratuity Act. The learned Single Judge had rightly noted the same and dismissed the Writ Petitions.

10. It is further submitted that the appellants are not employees of the 1st respondent Corporation and that they continued as abkari workers. Reliance is placed in this respect on the service conditions of abkari workers as evolved by the respondent corporation. Pointing to Ext.R1(a) G.O. dated 18.02.2002, wherein it had been concluded that the membership of the relevant categories of the Abkari Workers Welfare Fund will continue, and the contribution of the workers will be collected from the wages of the workers and, along with the contribution of the employer, will be remitted to the Welfare Fund Board. Thus, the benefits already availed under the scheme and the fund disentitles the appellants from raising any claims as seen made in the W.P.(C).

11. Reliance is also placed on the bilateral agreement entered into between the 1st respondent Corporation and the union leaders of the different trade unions, which had been produced as Ext.R1(b). The learned counsel points to the terms of settlement at clause (iii)(b) thereof in which it had been stated that the benefits like provident fund and gratuity etc. are covered under the Abkari Workers Welfare Fund Board and hence the 1st respondent shall be making statutory contribution along with the contribution of the worker to the Kerala Abkari Workers Welfare Fund Board. Exts.R1(a) and (b) apply to abkari workers enrolled till 01.04.2000. Further, the chart laid out in the counter affidavit filed in the W.P., reveals that the Gratuity Act is not more beneficial than the Scheme, and on the said ground, too, the learned Single Judge was right in dismissing the W.P.(C). It is thus submitted that the Writ Appeals do not merit any interference and they are only to be dismissed.

12. We have heard both sides in detail and have considered the contentions put forth. The principal question that comes up for consideration in these appeals is whether the learned Single Judge was right in dismissing the W.P.(C)s holding that the appellant employees, being eligible to provident fund and gratuity under the Abkari Workers Welfare Fund Scheme, are disentitled from claiming gratuity under the Gratuity Act and whether they stand excluded from the definition of ‘employee’ under the Gratuity Act. The correctness of the conclusion arrived at by the learned Single Judge that the contentions of the appellants, if affirmed, would amount to double payment of gratuity, ie., one under the welfare fund and the other under the Gratuity Act, and thus lead to unlawful enrichment, is also to be scrutinised. Before proceeding to consider the said questions, it would be relevant to remind ourselves of the settled law on the point regarding entitlement to gratuity. Sections 2 (e), 4 (5), 5 and 14 of the Gratuity Act assume relevance in the context of these appeals.

13. Section 2 (e) of the Gratuity Act defines an ‘employee’ as follows:

                            “(e) "employee" means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.”

The exclusion from the term ‘employee’ envisaged in Section 2 (e) is thus with respect to persons who hold a post under the Central Government or a State Government and are governed by any other Act or by any Rules providing for payment of gratuity.

14. As regards Section 4 (5) of the Gratuity Act, it preserves better gratuity benefits by stipulating that nothing in Section 5 relating to payment of gratuity shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. This ensures that the minimum gratuity prescribed by the Act does not prevent employees from claiming more favourable benefits from awards, agreements contracts with the employer.

15. Section 5 of the Gratuity Act envisages a power to exempt whereby the Government may issue a notification to exempt any establishment or group of employees from the provisions of the Gratuity Act if they already receive gratuity or pension benefits that are not less favourable than those provided under the Act. Such exemptions may apply to entire establishments or specific employees/classes of employees. A notification in the said respect could be issued retrospectively, but not earlier than the Act’s commencement, and not in a manner that could prejudicially affect the interests of any person.

16. Section 14 of the Gratuity Act envisages an overriding effect on the provisions therein by stipulating as follows:

                            “The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.”

Section 14 thus ensures that the provisions of the Gratuity Act will prevail over any other law, Rule, contract or instrument that is inconsistent with the stipulations therein. The benefits and protections of the Gratuity Act thus cannot be taken away by agreements or regulations that offer fewer benefits, and the same applies to all employees to whom the Act is applicable.

17. Statutory mandates being so, the precedents laid down by the Hon’ble Supreme Court and by this Court on the subject also assume relevance. As regards exemption from payment of gratuity under the Gratuity Act, the Hon’ble Supreme Court in Allahabad Bank and another v. All India Allahabad Bank Retired Employees Association (2010 KHC 6062) has held that an establishment is bound to pay gratuity unless a specific exemption has been obtained from the appropriate Government. Thus, there cannot be an exemption from payment of gratuity unless granted by the appropriate Government.

18. In Municipal Corporation of Delhi v. Dharam Prakash Sharma and another [(1998) 7 SCC 221], it has been held that their mere fact that the gratuity is provided for under the Pension Rules will not disentitle an employee to receive the payment of gratuity under the Gratuity Act in view of the overriding effect of the latter statute. In BCH Electric Ltd. v. Pradeep Mehra [(2020) 15 SCC 262], the Hon’ble Supreme Court held that for applicability of Section 4(5), two choices must be available to employee, i.e., one under provisions of Act and other under arrangement with employer, and if the latter offers better terms of gratuity under “any award or agreement or contract with employer”. The relevant portion of the judgment reads as follows:

                            “19. For Section 4(5) of the Act to get attracted, there must be better terms of gratuity available and extendable to an employee “under any award or agreement or contract with the employer” as against what has been provided for under and in terms of the Act. In other words, as against what is made applicable by the Act, if better terms are available under any such arrangement with the employer, Section 4(5) stipulates that nothing in Section 4 shall affect the right of any employee to receive such better terms. Thus, when two choices are available, one under the provisions of the Act and one under such arrangement with the employer and if the latter offers better terms, the employee cannot be denied right to receive those higher benefits.”

19. The Hon’ble Supreme Court in Nagar Ayukt Nagar Nigam, Kanpur v. Mujib Ullah Khan and another [(2019) KHC 6391] has held that the Central Government statute has an overriding effect over other laws.

20. In Allahabad Bank v. A.C.Aggarwal [(2013) 4 SCC 141], reference was made to Section 14 of the Gratuity Act and it was held that:

                            “19. In view of the plain language of the above reproduced provision, which contains a non obstante clause, every eligible employee is, notwithstanding anything inconsistent contained in any other enactment or instrument or contract is entitled to gratuity. Therefore, even if the respondent had opted for pension, he could have legitimately claimed gratuity without being required to refund the amount of pension already received by him.”

A Division Bench of this Court in Kerala State Co-operative Bank Ltd., Thiruvananthapuram v. S. Viswanathamallan and another [2022 (4) KHC 717] referring to the judgment in BCH Electric Limited v. Pradeep Mehra [(2020) 15 SCC 262] has held that when two choices are available, one under the provisions of Gratuity Act and other under such arrangement with the employer and if the latter offers better terms, employee cannot be denied the right to receive those higher benefits. This Court in Rajendra Prasad v. State of Kerala (2023 (4) KHC 136) held that the employees of the Kerala State Housing Board could claim gratuity in terms of Section 4 of the Act as the Gratuity Act has an overriding effect over Kerala Service Rules Part III, though, in such circumstances, they cannot claim gratuity under other Rules.

21. It follows from the above settled position of law as discernible from the statutory provisions and the precedents that exclusion from the definition of employee under Section 2 (e) requires two aspects to co-exist, ie, he must be holding a post under the Central Government or a State Government and must be governed by another Act or by any Rules providing for gratuity payment. The latter part alone cannot be extrapolated to deny entitlement to gratuity. The learned Judge thus erred in concluding that a person who is governed by any other Act or Rules for providing payment of gratuity will be excluded from the definition of employee under the Gratuity Act and the provisions thereof. Mere coverage of benefits, under any other law by itself will not suffice to exclude a person from the definition of employee. The former part that is, he should be holding a post under Central or State Government must also be satisfied. The learned Single Judge erred in this respect.

22. As regards the question of exemption, it is trite that an establishment is bound to pay gratuity unless a specific exemption has been obtained from the appropriate Government. Admittedly, in the case at hand, no such exemption had been issued as regards the payment of gratuity to the appellants. The mere fact that the gratuity is mentioned among many other benefits offered under the Scheme, will not disentitle the appellants from seeking the payment of gratuity under the Gratuity Act. This is so that the Gratuity Act is a Central Statute that has an overriding effect over other laws. It is open to the appropriate Government to exempt any establishment from the operation of the provisions of the Act, if in its opinion the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under the Act. If the Government has not issued such exemption, the entitlement to claim and receive gratuity continues to vest in the employee and cannot be denied. It is also relevant to note in this context that the Gratuity Act is a social welfare legislation, and when social security legislations are being interpreted, they are to be interpreted liberally, giving the widest possible meaning which the language permit [See Maniben Maganbhai Bhariya v. District Development Officer, Dahod and others [(2022) 16 SCC 343].

23. The learned Single Judge had concluded that abkari workers like the appellants form a different class and cannot be equated with the regular employees of the respondent corporation who are working in the sanctioned posts. Further since a bilateral agreement had been entered into between the respondent corporation and the various trade unions which envisaged benefits like provident fund and gratuity it was concluded that the appellants are not entitled to gratuity under the Gratuity Act. In this respect, we find merit in the contention of the learned counsel for the appellants that a classification of employees of the Corporation unilaterally without a comparative study of the benefits accruing under both statutes is not a proper method to be adopted especially since a statutory right is denied on the basis of such tentative classification. Such an exercise of classification ought to be carried out with great circumspection and care to analyse the comparative merits and should mandatorily be followed up by the Government with the invocation of the exemption provision. Unilateral classification which found approval in the impugned judgment cannot be justified especially when it denies the statutory right to gratuity. The conclusion regarding unjust enrichment too cannot be sustained as any denial of statutory right through a manner or method beyond what is envisaged under law is improper and unsustainable. Receipt of amounts/emoluments under a scheme/fund evolved under law and simultaneous receipt of a statutorily ordained gratuity cannot be termed unjust enrichment. If the State perceives it as double benefit the power to exemption ought to have been invoked as envisaged in law. On the said ground too, the Writ Appeal has to be allowed. In view of the above, we find that the reasoning of the learned Single Judge is erroneous and the impugned judgment is to be set aside. It is hereby ordered so and the appeals are allowed. Respondents are directed to pay gratuity to the appellants herein based on their eligibility under the relevant Service Rules of the respondent corporation as well under the Gratuity Act. Necessary steps in the said direction shall be taken by the 1st respondent Corporation expeditiously, at any rate, within a period of three months from the date of receipt of a copy of this judgment.