IMPORTANT POINT
A decision rendered without taking into account the statutory provision cannot be considered to be a binding precedent.

Headnote:(i) SERVICE LAW — Gratuity — Payment of Gratuity Act, 1972 — Section 2(e) and 2(f) and 2(a)(i) — Railway Services (Pension) Rules, 1993 — Rules 49 and 70 — Respondent was a Station Master in Eastern Railway and retired on 31-1-1995 — He was paid 16½ months emoluments comprising basic salary and 20% dearness allowance as Death-cum-Retirement Gratuity calculated in terms of Rules of 1993 — Another similarly situated person claimed and obtained benefit of gratuity in terms of provisions of Payment of Gratuity Act wherein element of dearness allowance was calculated at 125% of basic pay — Tribunal relying on decision in Pritam Singh’s case allowed application in favour of respondent — High Court dismissed writ holding that 1993 Rules did not make employee of Railway disentitled to benefit of gratuity under 1972 Act — Appeal — Interpretation Clause in Section 2(e) of the Act takes out from the purview of the Act a person who holds post under Central Govt. and whose terms and conditions of service governed by an Act or Rules providing for payment of gratuity — Rule 49 of 1993 Rules provided for manner in which emoluments were to be calculated and the pay in revised scales under Fourth Pay Commission Report — Question of non-applicability of 1972 Act and consequent applicability of 1993 Rules had not arisen for consideration in Pritam Singh case — Only because SLP against Pritam Singh was dismissed, same would not mean that any law within meaning of Article 14 of Constitution was laid down — Pritam Singh was rendered per incuriam it did not take into consideration the exclusionary clause in Section 2(e) of 1972 Act — Impugned judgment was liable to be set aside.
       Held : The Tribunal indisputably granted relief to the Respondent solely relying on or on the basis of the decision in Pritam Singh. In Pritam Singhs case indisputably the question as regards non-applicability of the 1972 Act and consequent applicability of the 1993 Rules had not arisen for consideration. The controlling authority in Pritam Singhs case proceeded on the basis that the provisions of the 1972 Act were applicable. The Tribunal in Pritam Singh opined:
       "...The Controlling Authority has considered the definition of term wages and came to the conclusion that the applicant is eligible for getting the gratuity. We do not see any infirmity or illegality on the order as averred by the Petitioner in this Original Application. According to us, there is no merit in the application which is only to be dismissed. Accordingly, we dismiss Original Application with no order as to costs."
       Our attention has also been drawn to the fact that the Central Administration Tribunal, Principal Bench in OA No. 700 of 2004 in the matter of Federation of Central Government Pensioners Association Organisations, Calcutta v. Union of India by a judgment and order dated 1st October, 2004 held that the decision of the Tribunal in Pritam Singh was rendered per incuriam and, thus, did not create any binding precedent. The Railway Administration in terms of its speaking order dated 4.6.2004 also held so. The Tribunal, unfortunately, did not apply its mind to that aspect of the matter and proceeded to grant relief to the Respondent herein solely relying on or on the basis of the said decision. Pritam Singh, in our opinion, did not create any binding precedent. Only because this Court dismissed the special leave petition, the same would not mean that any law within the meaning of Article 14 of the Constitution was laid down thereby. Pritam Singh was evidently rendered per incuriam as the statutory provisions relevant for determining the issue had not been taken into consideration. It is well-settled that a decision is an authority for what it decides and not what can logically be deduced therefrom. The decision in Pritam Singh having indisputably not taken into consideration, the exclusionary clause contained in Section 2(e) of the 1972 Act cannot be held to be an authority for the proposition that despite the provisions of the 1993 Rules, the 1972 Act would apply in the case of the railway servants.(Paras 16 to 18)
       We have noticed hereinbefore that in terms of the 1993 Rules the emoluments were to be paid in terms of the recommendations made by the Fourth Pay Commission. The Fifth Pay Commission no doubt recommended that dearness pay be linked to All India Consumer Price Index of 12.1.1966 as on 1.7.1993 but, the entitlements of the employees in terms thereof was directed to be prospectively affected with effect from 1.4.1995. The Central Government accepted the said recommendations only with prospective effect from 1.4.1995 in terms whereof 97% of the dearness allowance was to be paid to those who were drawing salary up to Rs. 3500/- as basic pay. The Respondent retired on 31.1.1995. The recommendations of the Fifth Pay Commission, thus, were not applicable in his case.(Para 25)
       The matter might have been different if the revised scale of pay in terms of the recommendations of the Fifth Pay Commission would have been made applicable to the cases of the employees who had also retired prior to 1.4.1995 as was noticed by this Court in U.P. Raghavendra Acharya and Ors. v. State of Karnataka & Ors, [2006 (6) SCALE 23].(Para 27)
       (ii) PRECEDENT — A decision rendered without taking into account the statutory provisions cannot be taken to be a binding precedent.

JUDGMENT

S.B. Sinha, J. — Leave granted.

2. The Respondent was a Station Master working in Sodepur Railway Station, Eastern Railway. He retired on 31.1.1995. He was paid 16 ½ months emoluments comprising basic salary and 20% dearness allowance towards Death-Cum-Retirement Gratuity.

3. One Pritam Singh who is said to be similarly situated, however, claimed and obtained such benefits of gratuity in terms of the provisions contained in the Payment of Gratuity Act, 1972 (for short "the 1972 Act") in terms whereof the element of dearness allowance was calculated at the rate of 125% of basic salary. A special leave petition filed thereagainst was dismissed by this Court by an order dated 13.2.2002 holding:

"This is not a fit case for our interference under Article 136 of the Constitution. Hence the appeal is dismissed."

4. Principally, relying on the said decision, the Respondent filed an original application before the Central Administrative Tribunal claiming payment of gratuity on the same terms and for recovery of purported arrears of the difference of gratuity. The Tribunal by an order dated 25.2.2004 directed the Appellant to consider the Respondents case whereupon a speaking order was passed by the Appellant on 4.6.2004 inter alia holding that the case of the Respondent was not governed by the provisions of the 1972 Act but by the provisions of the Railway Services (Pension) Rules, 1993 (for short "the 1993 Rules").

5. Another original application was filed by the Respondent questioning the validity of the said order before the Tribunal which was registered as OA No. 576 of 2004. The said application was allowed by an order dated 1.12.2004 holding inter alia:

"Mr. De, the learned counsel for the respondents to a query replied that Pritam Singh case was complied with by the Railway Authorities. It is most unfortunate to state here that the DRM treated the matter in a different manner in order to avoid payment and has passed such illegal order by stating that dismissal of SLP by the Honble Supreme Court does not amount to a decision on merits. He has lost sight of the fact that the CAT does not hold the jurisdiction to sit in appeal against the order passed by the Controlling Authority under the Gratuity Act. In Pritam Singhs case an independent direction was passed by the CAT by invoking the provisions of Gratuity Act. Similar benefit ought to have been given to the present applicant. From the totality of the facts and circumstances of the case, I direct the respondent No. 2 to pay the Gratuity as claimed by the applicant in terms of Section 4 of the Indian Gratuity Act, 1972 together with the interest @12% per annum from the date when it became due till the date of payment and file compliance report within four months, failing which appropriate action, as deemed fit, will be taken."

6. A writ petition filed by the Appellant questioning the legality of the said Order was dismissed by a Division Bench of the High Court holding that the 1993 Rules do not make an employee of the Railways disentitled to the benefit of gratuity under the 1972 Act. It was furthermore held that there was no reason as to why the decision of the Tribunal in Pritam Singh would not be given effect to.

7. Mr. K.P. Pathak, learned Additional Solicitor General appearing on behalf of the Appellant urged that Section 2(e) of the 1972 Act will have no application in view of the fact that the Respondent being a railway servant was an employee of the Central Government and was being governed by the 1993 Rules.

8. Mr. Manik Lal Banerjee, Respondent appearing in person, on the other hand, contended that Section 2(e) of the 1972 Act should be interpreted conjointly with Section 2(f) defining employment and Section 2(a)(i) defining establishment and so construed, it must be held that the same is applicable to the cases of railway employees also. Strong reliance in this behalf has been placed on The Executive Engineer (Construction) Southern Railway, Quilon and others

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2006 Supreme(SC) 666

IMPORTANT POINTA decision rendered without taking into account the statutory provision cannot be considered to be a binding precedent.

Cases Referred (1)

IMPORTANT POINT
A decision rendered without taking into account the statutory provision cannot be considered to be a binding precedent.