Bank & ANR. Vs. A. India Allahabad Bank Retired Emps. Assn  INSC 1798
(15 December 2009)
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1478 OF
2004 Allahabad Bank & Anr. ...Appellants VERSUS All India Allahabad Bank
Retired Emps. Assn. ...Respondent WITH WRIT PETITION (CIVIL) NO. 150 OF 2007
All India Allahabad Bank Retired Emps. Assn. ...Petitioner Versus Allahabad
Bank & Anr. ...Respondents With WRIT PETITION (CIVIL) NO. 237 OF 2007
Allahabad Bank Retirees Assn. ...Petitioner Versus 2 Controlling Authority
& Anr. ...Respondents
SUDERSHAN REDDY, J.
All India Allahabad Bank Retired Employees Association (for short
`Association') filed a writ petition invoking the original jurisdiction of the
Allahabad High Court under Article 226 of the Constitution of India with a
prayer to issue a writ of mandamus directing the appellant bank herein to pay
gratuity to the members of its Association under the Payment of Gratuity Act,
1972 ( for short `the said Act'). The High Court on due consideration of the
matter declared that the retired employees of the appellant bank were entitled
to the benefit of gratuity under the said Act and accordingly directed the
payment of gratuity within the time specified in the judgment. The said
judgment of the Allahabad High Court is impugned in this appeal.
A short question that arises for our consideration in this appeal
is as to whether the retired employees of appellant bank are entitled to
payment of gratuity under the provisions of the said Act?
The retired employees of the appellant bank having formed an
association which includes officers and subordinate staff sent a legal notice
to the appellant bank on 27.11.1988 requiring it to release the amount of
gratuity to its members in accordance with the provisions of the said Act. The
case set up by the Association was that its members were being illegally
deprived of their statutory right to receive gratuity under the provisions of
the Act on the pretext that they had opted for pensionary benefits in lieu of
gratuity. It appears that on behalf of the Association applications were sent
to the competent authority in the prescribed proforma for payment of gratuity
in response to which the appellant bank made its stand explicitly clear that it
was not possible to make payment of gratuity in addition to pension. Since the
whole cause of action is based on the response of the 4 appellant bank dated
10.01.1989, it would be appropriate to notice the same in its entirety.
No. Admn./5/0280 Date: January 10,1989 The General Secretary All India
Allahabad Bank Retired Employees Association, Central Office, Ram Bhawan,
C-1254B, Sector-A, Mahanagar, Lucknow.
Payment of Gratuity This has reference to your letter Bank/14/8 dated
14.11.1988 and enclosures.
connection, we have to advise that Allahabad Bank has accepted contributory
Provident Fund Scheme, which is not available to Government employees. Besides
this, the Bank has a Pension Scheme in which an employee/officer may exercise
option letter for Pension or Gratuity; but the dual benefits are not available
under the scheme Since the respective pensioners have exercised their option
voluntarily for availing of pension in lieu of Gratuity on their retirement
from the bank's service, they are not eligible for gratuity at all.
receiving pension since their retirement and as such we are not in a position
to accede to your request for payment of gratuity in addition to pension to the
persons named in your letter under reference.
faithfully, Sd/- (R.K. Nath) Chief Manager (P.A.)"
The Association thereafter filed a writ petition asserting its
right that its members were entitled to receive gratuity in accordance with the
provisions of the Act. The contention was that the consent or option given by
the members of the Association opting for pension scheme would not deprive them
of their statutory right to receive gratuity under the provisions of the Act.
The appellant bank resisted the writ petition filed by the Association mainly
relying upon the Awards known as Shastry Award and Deasai Award and subsequent
settlements under which employees were entitled either to the benefit of
pension or benefit of gratuity at one's own option but not both. The Bank took
a specific stand that the members of the Association had voluntarily opted for
pension scheme, as a result thereof, they were not entitled to receive gratuity
as well since they have already exercised their option claiming benefit of
pension. The 6 submission was that at the time of their retirement all the
employees were paid contributory provident fund and pension in terms of option
exercised by them, under the relevant Pension Scheme of the bank and therefore,
they were not entitled to payment of any gratuity. The bank further asserted
that the employees opted for the pensionary benefits which, admittedly, are
better in terms as found by various Awards that pensionary scheme was really
more advantageous to the employees than that of the gratuity.
We may at this stage notice that appellant bank did not succeed in
its attempt to get the bank exempted from the operations of provisions of the
Before adverting to the question as to whether the retired
employees of the bank are entitled to payment of any gratuity, it may be just
and necessary to notice the objects and reasons and the scheme of the Act. It
was realised that there was no Central Act to regulate the payment of gratuity
to industrial workers, except the Working Journalists (Conditions of Service)
and 7 Miscellaneous Provisions Act, 1955. The Government of Kerala enacted
legislation for payment of gratuity to workers employed in factories,
plantations, shops and establishments. The West Bengal enacted an Ordinance on
3.6.1971 prescribing a similar scheme of gratuity.
was also being paid by some employers to their workers under Awards and
agreements. Since the enactment of the Kerala and the West Bengal Acts, some
other State Governments have also voiced their intention of enacting similar
measures in their respective States. It is under those circumstances the Union
Government realised that it has become necessary, to have a Central law on the
subject so as to ensure a uniform pattern of payment of gratuity to the
employees through out the country. The Act was intended to avoid different
treatment to the employees of establishments having branches in more than one
State. The proposal for Central legislation on gratuity was discussed in
various Labour Ministers' Conference, where Central legislation on payment of
gratuity was felt a necessity.
Section 4 (1) of the Act provides:
Gratuity shall be payable to an employee on the termination of his employment
after he has rendered continuous service for not less than five years,-- (a) on
his superannuation, or (b) on his retirement or resignation, or (c) on his
death or disablement due to accident or disease:"
The expression "employee" is defined in Section 2 (e) of
the Act as any person (other than 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......... . There is no dispute before us that the appellant bank is an
establishment and an employer within the meaning of the provisions of the Act.
Section 5 confers power upon the appropriate Government to exempt any
establishment, factory, mine, oilfield, plantation etc. from the operation of
the provisions of the Act, if, in its opinion, the 9 employees in such
establishment, factory etc. are in receipt of gratuity or pensionary benefits
not less favourable than the benefits conferred under the Act.
to exempt conferred upon the appropriate Government is not an unconditional
power. The appropriate Government is required to hear all the persons concerned
who are likely to be affected by the decision to be taken and the exemption
itself is subject to the conditions mentioned in the provisions of the Act
namely that employee or class of employees in the opinion of the government are
in receipt of gratuity or pensionary benefits not less favourable than the
benefits conferred under the Act.
A plain reading of the provisions referred to herein above makes
it abundantly clear that there is no escape from payment of gratuity under the
provisions of the Act unless the establishment is granted exemption from the
operation of the provisions of the Act by the appropriate Government.
Notwithstanding the subsequent improvements and embellishments the
stand taken by the bank was and is before us that the members of the
Association had accepted the Contributory Provident Fund Scheme and they opted
for pension in lieu of gratuity which was being paid and therefore are not
entitled to payment of gratuity under the provisions of the Act.
We shall proceed to examine the point urged by the learned counsel
for the appellant. Remedial statutes, in contra distinction to penal statutes,
are known as welfare, beneficient or social justice oriented legislations. Such
welfare statutes always receive a liberal construction.
They are required to be so construed so as to secure the relief
contemplated by the statute. It is well settled and needs no restatement at our
hands that labour and welfare legislation have to be broadly and liberally
construed having due regard to the Directive Principles of State Policy. The
Act with which we are concerned for the present is undoubtedly one such welfare
oriented legislation meant to confer certain benefits upon the 11 employees
working in various establishments in the country.
the principle in his inimitable style that benignant provision must receive a
benignant construction and, even if two interpretations are permissible, that
which furthers the beneficial object should be preferred. It has been further
observed: "We live in a welfare State, in a "socialist"
republic, under a Constitution with profound concern for the weaker classes
including workers (Part IV). Welfare benefits such as pensions, payment of
provident fund and gratuity are in fulfilment of the Directive Principles. The
payment of gratuity or provident fund should not occasion any deduction from
the pension as a "set-off". Otherwise, the solemn statutory
provisions ensuring provident fund and gratuity become illusory.
are paid out of regard for past meritorious services. The root of gratuity and
the foundation of provident fund are different. Each one is a salutary
benefaction statutorily guaranteed independently of the 1 (1981) 1 SCC449 12
other. Even assuming that by private treaty parties had otherwise agreed to
deductions before the coming into force of these beneficial enactments they
cannot now be deprivatory. It is precisely to guard against such mischief that
the non obstante and overriding provisions are engrafted on these
Interpreting the provisions of the said Act this Court Ltd.2
observed that pension and gratuity coupled with contributory provident fund are
well recognised retiral benefits governed by various statutes. These statutes
are legislative responses to the developing notions of the fair and humane
conditions of work, being the promise of Part IV of the Constitution. It was
observed: "the fundamental principle underlying gratuity is that it is a
retirement benefit for long service as a provision for old age.
of social security and social justice made it necessary to provide for payment
of gratuity. On the enactment of Payment of Gratuity Act, 1972 a statutory liability was cast on the employer to pay
gratuity." 2 (1984) 3 SCC 369 13
Gratuity payable to an employee on the termination of his
employment after rendering continuous service for not less than 5 years and on
superannuation or retirement or resignation etc. being a statutory right cannot
be taken away except in accordance with the provisions of the Act whereunder an
exemption from such payment may be granted only by the appropriate Government
under Section 5 of the Act which itself is a conditional power. No exemption
could be granted by any Government unless it is established that the employees
are in receipt of gratuity or pension benefits which are more favourable than
the benefits conferred under the Act.
Pensioners' Association And Another3, this Court explained that
there is always a distinction between the pension payable on retirement and the
gratuity payable on retirement. "While pension is payable periodically as
long as the pensioner is alive, gratuity is ordinarily paid only once on
retirement." No decision of this Court which 3 (1988)2 SCC 580 14 has
taken a view contrary to the decisions referred to herein above has been
brought to our notice.
In our considered opinion pensionary benefits or the retirement
benefits as the case may be whether governed by a Scheme or Rules may be a
package consisting of payment of pension and as well as gratuity. Pensionary
benefits may include payment of pension as well as gratuity. One does not
exclude the other. Only in cases where the gratuity component in such pension
schemes is in better terms in comparison to that of what an employee may get
under the Payment
of Gratuity Act the government may grant an exemption
and relieve the employer from the statutory obligation of payment of gratuity.
In the result, we find merit in the submissions made by the
learned senior counsel, Shri P.P. Rao appearing for the Association that
pension and gratuity are separate retiral benefits and right to gratuity is a
Shri Dhruv Mehta, learned counsel for the bank placed strong reliance on the
decision rendered by this 15 Court in DTC Retired Employees' Association &
Ors. his contention that the employees of the bank are not entitled to the twin
benefits of payment of pension and as well as gratuity. In that case, Delhi
Transport Corporation introduced the Pension Scheme for the first time on
27.11.1992, for its retired employees, as per which all employees of DTC
retiring on or after 3.8.1981, were to be covered for the purpose of pensionary
benefits. The existing employees at the relevant time and those who retired on
or after 3.8.1981, were required to exercise their option for the Pension
Scheme. The retired employees opting for the pension scheme were required to
refund the employer's share of provident fund received by them with interest
thereon. Those employees, who joined the service on 27.11.1992, and thereafter,
had no option but to be compulsorily covered under the Pension Scheme. This Court
found that the employees therein received gratuity at the time of their exit
from the service and subsequently opted for pension which had never been 4
(2001) 6 SCC 61 16 a part of their service conditions. It is under those
circumstances, this Court took the view that it was a condition precedent that
in order to get the benefit of the Pension Scheme, they were required to refund
the gratuity received by them at the time of retirement. It was clear that at
the time of receipt of gratuity they were not entitled to get pension. The
employees have opted for payment of pension only after the introduction of the
Scheme for the first time. DTC (supra), in our considered opinion, is not an
authority for the proposition that an employee who receives the pension is not
entitled to the payment of any gratuity. This decision is of no assistance to
Learned counsel for the appellant has strenuously contended that
under the Old Pension Scheme of the Bank, only two terminal benefits namely,
Contributory Provident Fund and either gratuity or pension were required to be
paid to the employees of the bank and not both. The bank in view of the Awards,
circulars and statutory regulations is not under any legal obligation to 17 pay
gratuity as a third retiral benefit. The submission was that ever since the Payment of Gratuity
Act came into force in 1972, no employee was paid
both pension and gratuity till 1995, when the Pension Regulations came into
force. It is the case of the bank that the optional scheme of pension prevalent
at the relevant time was a better mode of payment and therefore was a better
form of retiral benefit within the meaning of Section 4 (5) of the Act. In this
regard, he relied on the decision of this Court Maharashtra & Ors.5 In that
case a policy decision was taken by the bank to extend the benefit of better
rate of gratuity to a large number of its employees and a scheme was
accordingly formulated to the effect that such of those employees who were on
its roll on and from 1.12.1975, the rate of gratuity was to be calculated on
one month's salary for every completed year of service with ceiling limit of 20
months’ salary. It was operative from 1975 to 19.7.1996. The employees of the
bank accepted the scheme and availed the benefit thereof.
8 SCC 514 18 Thereafter the scheme was amended providing for payment of
gratuity at the rate of 26 days' salary for every completed year of service
with a ceiling limit of Rs. 1.7 lakhs which was operative from May, 1994 to
September, 1997. Yet again, a scheme was floated raising the ceiling limit of
Rs. 1.7 lakhs to Rs. 2.50 lakhs. The employees retired during the currency of
the scheme formulated by the bank were offered gratuity in terms whereof the
ceiling limit was fixed at Rs. 1.7 lakhs and Rs. 2.50 lakhs between the period
20.7.1996 and 30.11.1999 and the period 1.12.1999 to 17.1.2005, respectively
and the amount of gratuity so offered to them in terms of the scheme was accepted.
However, they raised a claim that they were entitled to the benefit of both the
schemes as also the ceiling limit fixed under the Amendment Act, 1998, raising
the ceiling limit to Rs. 3.50 lakhs. On the facts, this Court framed a question
for its consideration as to whether keeping in view the provisions contained in
sub-section (5) of Section 4 of 1972 Act, the employees although would be
entitled to the benefit of ceiling limit of Rs. 3.5 lakhs, the rate of gratuity
should be calculated at 19 the rate of 26 days' instead and in place of 15
days' salary for every completed year of service in terms of the 1972 Act. We
fail to appreciate as to how the said judgment is of any relevance to resolve
the question that arises for our consideration in the present case. It is not
the case of the bank that at the time of superannuation of the employees there
was a scheme for payment of gratuity under which the employees were entitled to
payment of gratuity and the said scheme in comparison to that of the provisions
of the Act was more beneficial to the workmen.
other hand, the scheme that was prevalent at the relevant time in clear and
categorical terms provided that "the gratuity will not be payable in case
where a pension is granted by the Bank. But if a pensioned officer should die
before receiving any pension payments an aggregate sum at least equal to the
gratuity which he would otherwise have received then the Bank will pay the
difference between such aggregate sum and gratuity to the officer's widow; if
any, otherwise to his legal representative." Be it noted that in the
counter affidavit filed in the High Court the Bank placed reliance on 20
Shastry and Desai Awards which have taken the view that Allahabad Bank which
had pension scheme of its own was more advantageous than the provisions of the
gratuity to its employees. It is asserted that under the said Awards and the
subsequent settlements an employee entitled to receive either the benefit of
pension or gratuity at his own option but not both. The contention was that
such of those Employees who had voluntarily opted for pension scheme were not
entitled to receive the gratuity as well.
respective comparative figures under pension and/or gratuity, in terms of
Shastry/Desai Awards and/or Bipartite Settlement on one hand and the gratuity
payable under the Act on the other were made available for the perusal of the
Court to buttress the Bank's submission that what has been paid to the
employees was better in terms and more favourable than the benefits conferred
under the Act. The submission is totally devoid of any merit for more than one
reason namely, that it is for the appropriate Government to form the requisite
opinion that the employees were in receipt of gratuity or pensionary benefits
which were more favourable than the benefits 21 conferred under the Act and
therefore, the establishment must be exempted from the operation of the
provisions of the Act. The Bank having failed to obtain exemption from the
operation of the provisions of the Act cannot be permitted to raise this plea.
No establishment can decide for itself that employees in such establishments
were in receipt of gratuity or pensionary benefits not less favourable than the
benefits conferred under the Act.
(5) of Section 4 protects the rights of an employee to receive better terms of
gratuity from its employer under any Award or agreement or contract as the case
may be. Admittedly the Scheme under which the employees of the Bank received
the pension was in lieu of gratuity. There is no question of comparing the said
Scheme and arrive at any conclusion that what they have received was much
better in terms than the benefits conferred under the Act. Reliance upon
sub-section (5) of Section 4 is therefore unsustainable.
This Court in Municipal Corporation Delhi vs. Dharam Prakash
Sharma & Ors.,6 observed: "the 6 (1998)7SCC 221 22 mere fact that the
gratuity is provided for under the Pension Rules will not disentitle him to get
the payment of gratuity under the Payment of Gratuity Act. In view of the overriding provisions contained in Section
14 of the Payment of Gratuity Act, the provision
for gratuity under the Pension Rules will have no effect. Possibly for this
reason, Section 5 of the Payment of Gratuity Act
has conferred authority on 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 this
Act. Admittedly MCD has not taken any steps to invoke the power of the Central
Government under Section 5 of the Payment of Gratuity Act. In the aforesaid premises, we are of the considered
opinion that the employees of the MCD would be entitled to the payment of
gratuity under the Payment of Gratuity Act
notwithstanding the fact that the provisions of the Pension Rules have been
made applicable to them for the purpose of determining the pension. Needless to
mention that the 23 employees cannot claim gratuity available under the Pension
Rules" (emphasis supplied).
present case it is not the case of the Bank that its employees had claimed and
received gratuity under the pension scheme.
The decision in the case of Workman of Metro which this Court took
the view that on true construction the expression `Award' occurring in
sub-section (5) of Section 4 does not mean and cannot be confined to `existing
Award' but includes any Award that would be made by an adjudicator wherein
better terms of gratuity could be granted to the employees if the facts and
circumstances warrant such grant. This decision cited by the learned counsel
for the appellant is of no relevance and in no manner supports the appellant's
Learned counsel for the appellant relying upon the Swarnakar &
Ors.8 contended that once the employees 7 8 (2003) 2 SCC 721 24 have exercised
their option to avail pension made available to them under the Old Pension
Scheme, and having drawn the benefits there under cannot be permitted to resile
from their stand. In that case a group of employees of the State Bank of India
accepted the amount of ex-gratia under the scheme known as `the Employees
Voluntary Retirement Scheme' and thereafter made an attempt to resile from the
very Scheme itself.
It is under those circumstances this Court observed that
"those who accepted the ex-gratia payment or any other benefit under the
Scheme, in our considered opinion, could not have resiled there from." In
the present case the real question that arises for our consideration is whether
the employees having exercised their option to avail the benefits under the
pension scheme are estopped from claiming the benefit under the provisions of
the Act? The appellant being an establishment is under the statutory obligation
to pay gratuity as provided for under Section 4 of the Act which is required to
be read along with Section 14 of the Act which says that the provisions of the
Act shall have effect notwithstanding anything 25 inconsistent therein
contained in any enactment or in any instrument or contract having effect by
virtue of any enactment other than this Act. The provisions of the Act prevail
over all other enactment or instrument or contract so far as the payment of
gratuity is concerned. The right to receive gratuity under the provisions of
the Act cannot be defeated by any instrument or contract. of Maharashtra &
Anr.9 relying upon the decision of this that the word `instrument' would
include award made by the Industrial Tribunal. It is thus clear that
notwithstanding the Desai and Shastry Awards and the subsequent settlements the
members of the employees association are entitled to avail the benefit
conferred upon them for payment of gratuity under the provisions of the Act.
The employees cannot be deprived of their valuable statutory right conferred
upon them to receive payment of gratuity.
9 SCC 438 10 (1966) 2 SCR 353 26
There is no material placed before us that the employees while
opting for the pension scheme at the time of their superannuation/retirement
either expressly or impliedly waived their statutory right to claim payment of
gratuity under the provisions of the Act. In the circumstances we find no merit
in the submission made by the learned counsel for the appellant in this regard.
For the aforesaid reasons we find no merit in the appeal.
During the pendency of the appeal this Court by its order dated
22.3.2006 directed the parties to appear before the Controlling Authority and
the Controlling Authority was required to decide as to whether the benefits
under the Allahabad Bank Employees Pension Scheme (Old) are more beneficial in
comparison to that of the payment of Gratuity under the provisions of the Act.
Following is the order passed by this Court:
the order of the High Court speaks about the benefit of gratuity under the Payment of Gratuity
Act, 1972 and a better Scheme, it does not indicate
as to who is the Authority to decide which one of the schemes is better.
According to the Bank, the 27 employees concerned had accepted the particular
Scheme which had the option of either the pension or the gratuity. It is
pointed out that the there was no challenge to the legality of the arrangement
made or the Scheme itself.
other hand, Mr. Trivedi, learned counsel for respondent no. 1 submits that
whether the Scheme is better is relatable to the benefits available under the
Act and nothing beyond it. The High Court has come to an abrupt conclusion that
a Statute overrides an agreement.
no plea in this regard in the writ petition. Be that as it may, we permit the
parties to appear before the controlling authority who shall take a decision
within three months. The parties are given liberty to produce copy of the order
before the controlling authority so that it can fix a date for hearing.
parties are permitted to take all stands which are being raised in the present
appeal. The matter shall be listed after four months."
The Controlling Authority held that the amount received by the
employees under the said Scheme is much more than what they could have received
under the Act. The benefits according to the Controlling Authority available
under the Scheme are more beneficial than the gratuity payable under the Act.
Being aggrieved by the order of the Controlling Authority two writ
petitions were filed, one by All India Allahabad Bank Retired Employees
Association and the other by the Allahabad Bank Retirees' Association
challenging the validity of the order of the Controlling Authority dated
Section 2 (d) of the Act defines Controlling Authority as an
authority appointed by the appropriate Government under Section 3 of the Act.
Under Section 3 the Controlling Authority is made responsible for the
administration of the Act and it further provides for appointment of different
authorities for different areas.
deals with for determination of the amount of gratuity. Every person who is
eligible for payment of gratuity under the Act is required to send a written
application to the employer in the prescribed form for payment of such
gratuity. Sub-section (2) of Section 7 provides once the gratuity becomes
payable, the employer shall, whether an application has been made or not,
determine the amount of gratuity and give notice in 29 writing to the person to
whom the gratuity is payable and also to the Controlling Authority specifying
the amount of gratuity so determined and arrange to pay the amount of gratuity
to the person to whom the gratuity is payable.
Scheme envisaged under Section 7 of the Act, is that in case of any dispute to
the amount of gratuity payable to an employee under the Act or as to the
admissibility of any claim of, or in relation to, an employee payable to
gratuity etc. the employer is required to deposit with the Controlling
Authority the admitted amount payable as gratuity. In case of any dispute
parties may make an application to the Controlling Authority for deciding the
dispute who after due inquiry and after giving the parties to the dispute, a
reasonable opportunity of being heard, determine the matter or matters in dispute
and if, as result of such inquiry any amount is found to be payable to the
employee, the Controlling Authority shall direct the employer to pay such
amount to the employee. Sub-section (7) of Section 7, provides for an appeal
against the order of the Controlling Authority. The Act, nowhere confers any
jurisdiction upon 30 the Controlling Authority to deal with any issue under
sub- section (5) of Section 4 as to whether the terms of gratuity payable under
any Award or agreement or contract is more beneficial to employees than the one
provided for payment of gratuity under the Act. This Court's order could not
have conferred any such jurisdiction upon the Controlling Authority to decide
any matter under sub-section (5) of Section 4, since the Parliament in its
wisdom had chosen to confer such jurisdiction only upon the appropriate
Government and that too for the purposes of considering to grant exemption from
the operation of the provisions of the Act.
merits the conclusions drawn by the Controlling Authority that the Pension
Scheme (old) offered by the Bank is more beneficial since the amount of money
the pensioners got under the Pension Scheme is more than the amount that could
have been received in the form of gratuity under the provisions of the Act is
Controlling Authority failed to appreciate that sub- section (5) of Section 4
of the Act, protects the right of an employee to receive better terms of
gratuity under any 31 award or agreement or contract with the employer than the
benefits conferred under the Act. The comparison, if any, could be only between
the terms of gratuity under any award or agreement or contract and payment of
gratuity payable to an employee under Section 4 of the Act. There can be no
comparison between a Pension Scheme which does not provide for payment of any
gratuity and right of an employee to receive payment of gratuity under the
provisions of the Act. Viewed from any angle the order of the Controlling
Authority is unsustainable. The order is liable to be set aside and the same is
accordingly set aside.
However, the judgment of ours is applicable to only such of those
employees/workmen who retired from the service between 1.1.1986 and 31.10.1992.
In the result, the appeal preferred by the bank is dismissed with
costs quantified at Rs. 25,000/- and the writ petitions are allowed without any
order as to costs.
...................................J. (B. SUDERSHAN REDDY)
......................................J. (R.M. LODHA)
December 15, 2009.