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2025 Supreme(SC) 1042

SUPREME COURT OF INDIA
SUDHANSHU DHULIA, K. VINOD CHANDRAN, JJ.
Vikram Bhalchandra Ghongade – Appellant
Versus
The Headmistress Girls High School And Junior College, Anji (Mothi), Tah. And Distt. Wardha & Ors. – Respondents
Special Leave Petition (C) No. 19436 of 2024
Decided on : 14-07-2025

Advocates appeared:
For the Petitioner(s):Petitioner-in-person
For the Respondent(s): Mr. Satyajit A. Desai, Adv. Mr. Siddharth Gautam, Adv. Mr. Abhinav K. Mutyalwar, Adv. Mr. Sachin Singh, Adv. Mr. Ananya Thapliyal, Adv. Ms. Anagha S. Desai, AOR Mr. Pratik Kumar Singh, Adv. Mr. Aaditya Aniruddha Pande, AOR

Aided school teachers are entitled to gratuity under the applicable rules, and a nominee's designation allows claims without requiring a legal heirship certificate.

Headnote:(A) Payment of Gratuity Act, 1972 - Legal heirs' entitlement - Aided school teachers are covered under the Rules of 1982 for gratuity benefits. Relevant case law includes Birla Institute of Technology v. State of Jharkhand, asserting eligibility for gratuity. The court emphasizes that nomination holds no limit on legal heirship, allowing claims under the rules. (Paras 2, 6, 10, 11)

(B) Legal documents required - The court clarifies the necessity of a legal heirship certificate is not required where a nominee has been designated. Payments due to a nominee may be in trust for other heirs. (Paras 11, 12)

Facts of the case:
The petitioner, as a legal heir of a deceased teacher in an aided school, claimed gratuity, which was initially denied citing legal documentation issues and the applicability of different rules. The petitioner argues entitlement based on prior judgment establishing eligibility for gratuity under the Act of 1972 despite government remuneration under different rules.

Findings of Court:
The court concluded that aided school teachers are eligible for gratuity under the applicable rules, allowing the petitioner to claim DCRG without requiring a legal heirship certificate, and ordered payment of interest on the delayed amount.

Issues: The primary issues involve the legal eligibility of the petitioner under the Gratuity Act and the required documentation for claims.

Ratio Decidendi: The court held that aided teachers are effectively under the Rules of 1982 and clarified that nominating a beneficiary does not prevent інших legal heirs from claiming their rights, establishing that funds paid to a nominee are held in trust.

Result: Special Leave Petition allowed.

Judgement Key Points

Based on the provided legal document, here are the key points extracted:

  • Aided school teachers are entitled to gratuity under the Maharashtra Civil Services (Pension Rules), 1982, as their service conditions are regulated by the Government, rather than under the Payment of Gratuity Act, 1972. (!)
  • The entitlement of aided school teachers to gratuity under the Rules of 1982 is supported by the precedent set in Birla Institute of Technology v. State of Jharkhand. (!)
  • Although aided school teachers do not strictly hold a post under the State Government, their posts are sanctioned by the Government and they receive pay and allowances from the Government, making them akin to government employees for monetary benefits. (!)
  • When comparing gratuity benefits, the court must consider the scheme in toto; the Rules of 1982 provide more beneficial death gratuity terms (payable on death without a 5-year service minimum) compared to the Payment of Gratuity Act, 1972. (!)
  • The Rules of 1982 enable entitlement to both Death-cum-Retirement Gratuity (DCRG) and pension, whereas the Act of 1972 does not guarantee pension in all circumstances. (!)
  • A nominee's designation allows for the claim of gratuity without requiring a legal heirship certificate, as the payment made to a nominee is held in trust for all legal heirs. (!)
  • The employer is absolved from the obligation to identify and apportion shares among different legal heirs once a nominee has been designated. (!)
  • In cases where a nominee is paid, the recipient holds the funds in trust for other legal heirs, negating the need for a legal heirship certificate to process the claim. (!)
  • The petitioner was directed to approach the first respondent with an application for DCRG payment under the Rules of 1982, accompanied by a notarized affidavit undertaking to indemnify the Government against claims by other heirs. (!)
  • The court ordered the payment of simple interest at 7% per annum, calculated from one month after the date of the employee's death until the date of actual payment. (!)

Table of Content
1. claim for gratuity under payment of gratuity act. (Para 1)
2. legal heirship and eligibility for gratuity. (Para 2)
3. government's stance on legal heirs and claim documentation. (Para 3)
4. claims anomaly and necessity for documentation. (Para 4 , 5)
5. legal heirs' rights to gratuity under conflicting rules. (Para 6)
6. comparison of gratuity benefits under two legal frameworks. (Para 7 , 8)
7. applicability of rules of 1982 to aided school teachers. (Para 9 , 10)
8. trust aspect of nominee payments among legal heirs. (Para 11)
9. order for payment and interest to the petitioner. (Para 12 , 13)
10. disposal of pending applications. (Para 14)

JUDGMENT :

K. VINOD CHANDRAN, J.

1. The petitioner is the son of a teacher in an aided school, who died while in service. The petitioner as the legal heir claims gratuity under the Payment of Gratuity Act, 19721[For brevity ‘the Act of 1972’]. The petitioner’s claim was rejected by the original authority and the appellate authority under the Act and also the High Court against which the petitioner is before this Court.

2. The petitioner appeared in person and argued that the school has settled the General Provident Fund dues in his name clearly mentioning him as nominee and the question of legal heirship certificate never arose. Birla Institute of Technology v. State of Jharkhand , (2019) 4 SCC 513 clearly held that teachers are eligible for gratuity under the Act overruling the judgment placed on record by the learned Government Advocate reported in Ahmedabad (P) Primary Teachers’ Assn. v. Administrative Officer, (2004) 1 SCC 755, negativing the case of the Government that rules framed under Article 309 of the Constitution of India would apply. It is contended that without an exemption with respect to the schools in Maharashtra, the Gratuity Act cannot be made inapplicable. Further the exemption under sub-rule (5) of Rule 4 does not apply since the gratuity payable under the Act is far more beneficial than the scheme under the Rules of 1982.

3. The learned Government Advocate on the other hand submits that being an aided school, the employees are paid pay & allowances, while in service, by the Government so is the pensionary benefits including Death-cum-Retirement Gratuity (DCRG) paid under the Maharashtra Civil Services (Pension Rules), 19824[For brevity ‘the Rules of 1982’] brought out under Article 309 of the Constitution of India. There is no question of the petitioner being paid amounts under the Act of 1972. The petitioner admits that his father is surviving, who would also be a legal heir of the deceased. The petitioner hence has to produce a legal heir certificate and the claim of the father will also have to be dealt with. The High Court has in fact directed such consideration by the Government, on the Government’s own undertaking that it would be done expeditiously on an application being filed with required papers.

4. The petitioner approached the original authority under the Payment of Gratuity Act who found that there was a difference in DA, as asserted by the petitioner in his application and the last pay certificate of the deceased teacher which was produced before the authority, which makes the claim for DCRG anomalous. We cannot accept this contention since the DA will have to be ascertained from the last pay certificate issued by the employer. It was also held that the Act of 1972 though would be applicable to teachers, the definition of employee excludes a person holding a post under the Central Government and State Government; which the teacher was holding while she was in service. Finding that the petitioner’s mother’s service does not fall under the Act of 1972, the application was rejected.

5. The appellate authority found the order of the controlling authority to be perfectly in order. It was also noticed that the respondent had specifically contended that the petitioner had never approached the respondents with a proper documentation as to the death and legit

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