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2009(8) Supreme 235
SUPREME COURT OF INDIA
B. Sudershan Reddy and R.M. Lodha, JJ.
Allahabad Bank & Anr. — Appellants
versus
All India Allahabad Bank Retired Emps. Assn. — Respondent
Civil Appeal No. 1478 of 2004
Decided on : 15-12-2009
Payment of Gratuity Act, 1972 – Gratuity – Payment of – 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 can 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 benefits conferred under the Act. (Para 14)
Facts of the Case :
A short question that arose for consideration in Present appeal was as to whether the retired employees of appellant bank were entitled to payment of gratuity under the provisions of the said Act?
Findings of the Court :
The right to receive gratuity under the provisions of the Act cannot be defeated by any instrument or contract.No material to show that employees while opting for the pension scheme at 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 no merit was found in the submission made by appellant in this regard. Appeal having no merit was dismissed.
JUDGMENT
B. Sudershan Reddy, J. —
1. 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.
2. 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?
3. 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 appellant bank dated 10.01.1989, it would be appropriate to notice the same in its entirety.
“Ref. 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.
Dear Sir,
Payment of Gratuity
This has reference to your letter
Bank/14/8 dated 14.11.1988 and enclosures.
In this 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. They are 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.
Yours faithfully,
Sd/-
(R.K. Nath)
Chief Manager (P.A.)”
4. 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 s
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