The court's decision emphasized that the Scheme disentitles employees from claiming gratuity as a contractual right and allows the management to pay gratuity at its discretion.

CHANDRAKANTARAJ URS, J.

( 1 ) THIS is an appeal preferred by the unsuccessful plaintiff. It arises in the following circumstances: the plaintiff was an employee of defendant-2 - Eskaylab Limited. He resigned from the employment on 30-4-1980 allegedly on account of some injury he suffered to his toes. He was paid a sum of Rs. 3,202-50 as gratuity under the Scheme sponsored by the employer defendant-2, but the plaintiff refused to receive the same. The plaintiff learnt that other employees of defendant-2 had been paid more and, therefore, he entered into correspondence with defendant-2. He claimed that he was entitled to the maximum gratuity payable, namely, Rs. 30,000/- on account of his long service of 22 years which was unblemished. Not having received proper reply to his notice issued to defendant-2, he presented the suit.

( 2 ) THE defendants through defendant-2 resisted the claim. It was contended by them that the scheme governing the payment of gratuity to the plaintiff did not allow any amount other than what the employer in his discretion paid by way of gratuity. They admitted that they had paid Rs. 3,200-50 as gratutity to the plaintiff on his resignation which was declined by him. (However, it is noticed that the plaintiff restricted his claim to Rs. 26,797-50 after giving deduction to what the Company had offered to pay. But there was. no separate prayer in the alternative that the amount offered to be paid at least should be decreed to be paid ).

( 3 ) ON such pleadings, the trial Court framed as many as five issues and they are as follows :

1. Whether the plaintiff proves that he is entitled to gratuity under Rule 6 (iv) read with Rule 7 (a) of the Scheme? 2. Whether the plaintiff is entitled to gratuity amount of Rs. 26,797-50 ps? 3. Whether the plaintiff is entitled to interest? If so, at what rate? 4. Whether the defendant proves that the suit has not been valued properly? 5. To what amount?

( 4 ) (SIC) issues 1, 2 and 3, the Court below found against the plaintiff. In the result the suit came to be dismissed.

( 5 ) WE do not think it necessary to advert to all the evidence on record. The trial Court decided the question purely on the language of the Scheme which governed the service conditions of the plaintiff on the date of his resignation. The Scheme known as "employees' Group Gratuity Life assurance Scheme" which was marked as Exs. P-4 and P-5 corresponding to Exs. D-4 and D-5 marked by the defendants undisputedly and admittedly governs the case. Under Paragraph 6, the benefits of the Scheme are made available to employees who do not draw more than Rs. 1,000/per mensem. Paragraph-7 provides for cases in which gratuity is not payable subject to the exceptions therein. We therefore, must determine whether the plaintiff was entitled to payment of gratuity in the sums claimed by him under the proviso to Clause (a) of Paragraph-7 of the scheme as his salary was far above Rs. 1,000/- and therefore not covered by Paragraph-6 of the scheme, if the determination by us is in favour of the plaintiff, then the Judgment and Decree of the trial Court has to be reversed and this Court has to decree the suit of the plaintiff.

( 6 ) BEFORE us Mr. Krishnaiah learned Counsel for the appellant-plaintiff, has strenuously contended that there being no difference, as held by the Supreme Court between retirement and resignation, the plaintiff should have been awarded on proper application of the criteria or guidelines which the proviso to Clause (a) of Paragraph-7 contains and any exgratia payment made in the absolute discretion of the employer without having regard to the criteria or guidelines would be arbitrary exercise of the discretion and, therefore, violation of Article 14 off the Constitution, particularly when some of the employees who resigned or retired later than the plaintiff had been paid higher amount by way of gratuity which was admitted by the Company.

( 7 ) THE case relied upon by the teamed Counsel for the a

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