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1976 Supreme(SC) 283

SUPREME COURT OF INDIA
A.N.Ray, CJI., M.H.Beg : P.N. Shinghal, JJ.
A.P.State Road Transport Corporation, Hyderabad: General Manager, A.P.State Road Transport Corporation, Hyderabad: A.P.State Road Transport Corporation, Hyderabad: A.P.State Road Transport Corporation, Hyderabad
Versus
P.Venkateswara Rao: M.Ramamohan Rao: A.J.Ruben: B.Jammiah, Retd.Driver
Case No. : 36 , 54 of 1971
Date of Decision : 8/19/76
Advocates Appeared: Parthasarthy R. : Ramanujachayulu K.S. : Rao G.Narayana : Sinha L.N.

Advocates:
G.N.Rao, K.S.Ramanujacharyulu, L.N.Sinha, R.PARTHASARATHY

Headnote:

Industrial Disputes Act, 1947 – Section 33C(2) - Hyderabad Railway Department Establishment Code of 1949 - Rule 8.01, 8.19, 8,16, 8.05 , 8.05(iv) - Payment of Wages Act, 1936 – Section 15(2) - Service - Provident Fund - Entitled to Receive a Gratuity - Respondent who was employed, retired after putting in more than years of service - As he was a former employee of Nizams State Railway, his service conditions were governed by provisions of government of Hyderabad Railway Department Establishment Code of 1949 - He claimed that he was entitled to receive a gratuity at a half months salary for each year of qualifying service subject to a maximum of 15 months salary - Whether in permanent or temporary service or both being treated as dies noil - Whether gratuity is wages within meaning of Payment of Wages Act - Whether corporation had discretion to refuse to pay gratuity to respondent and whether it cannot be questioned - Whether respondent was rightly paid that amount as gratuity in past – Held, Court need not here set out relevant provident fund rules contained in Ch. 7 of Code - It is true that whole idea of provident fund, to which employer also contributes, seems to be different from a gratuity to which "good, continuous, efficient and faithful servant" may entitle an employee, yet, Court is unable to hold that employee is able to claim benefit of both a guaranteed or other provident fund, to which employer contributes, as well as to gratuity, as of right, in face of provisions of Rules 8.01 and 8.02 of gratuity rules set out above - Although Court have held that a claim to gratuity, as of right, cannot be put forward, under Code, by an employee who gets benefit of a provident fund also, yet, illegal payments of gratuity in past will not affect legal claims to provident fund - In Civil No amount awarded to an employee was in respect of payment due towards guaranteed provident fund which had nothing to do with a claim for gratuity - CIVIL Nos involve only claims to gratuity by persons who are entitled to provident fund - These claims, according to view taken by Court, are not admissible under law – Appeal allowed.

M.H.BEG, J.

(1) A number of appeals filed by the Andhra Pradesh State Road Transport Corporation are before us by grant of special leave under Article 136 of the Constitution of India, against orders of a Labour court passed under S. 33C(2) of the Industrial Disputes Act, 1947. The facts of the first of these appeals may be stated to illustrate the kind of circumstances in which a common question of law involved in these appeals arises.

(2) THE respondent P. Venkateswara Rao, who was employed on 6/10/1933, retired on 10/02/1968, after putting in more than 34 years of service. As he was a former employee of the Nizams State Railway, his service conditions were governed by the provisions of the government of Hyderabad Railway Department Establishment Code of 1949, (hereinafter referred to as the Code). He claimed that he was entitled to receive a gratuity at a half months salary for each year of qualifying service subject to a maximum of 15 months salary as laid down in Rule 8.01 of the Code, which says: 8.01. Condition of eligibility.-Gratuity is .granted at the discretion of government in the Railway Department as a reward for .good. efficient, continuous, and faithful service to a permanent railway servant if he is not a subscriber to the Provident Fund or to the Guaranteed Provident Fund. on his quitting the service. or, in the event of his death before receipt of gratuity to his widow or widows and/or dependent children. For purposes of this rule a monthly paid railway servant borne on the temporary establishment whose pay is charged to open line capital and revenue works on which he is employed shall be deemed to be a permanent railway servant only after he had rendered 4 years continuous service; railway servants belonging to the category of workshop staff, employed otherwise than in a supervisory capacity, shall also be considered as permanent railway servants only after they have rendered 4 years continuous service.

(3) THE other rules which seemed to have a bearing on the question before us are as follows: 8.02. A gratuity cannot be claimed as of right. 8.04. No gratuity shall he granted to a railway servant who has been removed from service by reason of any misconduct on his part. save with the express sanction of the authority competent to sanction the gratuity. 8.05. Qualifying service.-Except where otherwise provided for in these rules, service must be continuous and must also. in the opinion of the General Manager, be "good", "efficient" and "faithful" service to qualify for the gratuity. A gratuity may be granted on the fulfilment of the following conditions:-

(I) Completion of thirty years service: or

(II) Attainment of the age of fifty-five years, provided not less than fifteen years service has been completed:. or

(III) Retirement or resignation after fifteen years service, on grounds admitted by the authority competent to sanction the gratuity as good and sufficient from the point of view of the Administration; or

(IV) Retirement with less than fifteen years service, due to

(A) permanent physical or mental incapacity, or

(B) abolition of appointment if other suitable employment cannot he found for the railway servant.

8.12. The maximum period of service qualifying for gratuity is thirty years. 8.13. A railway servant who is retired in service after he has attained the age of fifty-five vears may be permitted to count the whole of his service, subject to the limit of thirty years, as qualifying for gratuity. 8.15. Service for which a railway servant has already received a retiring" gratuity or special contribution to the provident fund or to the guaranteed provident fund counts as qualifving service for the purpose of Rule 8.05 but it shall be excluded in calculating the amount of gratuity admissible under Rule 8.19. 8,16. When a railway servant is injured in the performance of his duty and is obliged to leave the service, he may be given the gratuity















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