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2006 Supreme(Bom) 1437
IN THE HIGH COURT OF BOMBAY
(Dr. D. Y. Chandrachud, J.)
HAFFKINE BIO-PHARMACEUTICALS CORPORATION LTD. - Petitioner.
vs.
MADHA V SHRIRAM SANT and another - Respondents.
W. P. No. 2814 of 2003
Decided on 11-9-2006
Advocates Appeared
For petitioner: N. R. Patankar with Vishwajit Sawant
For respondents : N. M. Ganguli
Headnote:Payment of Gratuity Act, 1972 - Section 4(3) - Retirement - Ceiling on gratuity on date of - Calculation of - An ex-employee of Haffkine Institute, Mumbai became employee of petitioner-Corporation w.e.f. 1.9.1975 - Retired on superannuation on 31.3.1992 - He was absorbed in Corporation on terms and condition of service as existing in Government service on 31.8.1975 - On date of retirement ceiling on gratuity was Rs. 50,000/- - Rightly paid gratuity of Rs. 50,000/-. - In the present case, it has not been demonstrated before the Court that the gratuity which was allowed to the first respondent by the Corporation was lower than the existing terms and conditions of service which prevailed in the Corporation on 31st August, 1975. In these circumstances, the Labour Court was clearly in error in granting to the first respondent the benefit of an enhanced gratuity purprotedly on the basis of the Government Resolution dated 2nd February, 1990. Ex facie, the Government Resolution had no application to the petitioner Corpora- tion. The Government Resolution dated 17th October, 1967 upon which reliance has been placed by the first respondent will not carry the case of the first respondent any further. Clause 5 of Appendix-A to the Government Resolution dated 30th April, 1975 provided that the pensionary liability in respect of services rendered under the Government by a permanent employee who is eligible for pension will be of Government and that the said pension will be payable when the employee finally retires from the newly formed institute or, as the case may be, the Corporation as per the Government Resolution dated 17th October, 1967. Clause 8 of the Government Resolution dated 17th October, 1967 only provides that the total gratuity admissible in respect of the services rendered under the Government and under the Public Undertaking should not exceed the amount that would have been admissible had the employee continued in Government service and retired on the same scale which he drew from retirement from the Public Undertaking. The aforesaid Government Resolution therefore will not advance the case of the first respondent.
2. The first respondent joined Haffkine Institute as a Laboratory Technician on 1st November, 1958. He was promoted thereafter as a Junior Scientific Officer. The first respondent retired from service on 31st March, 1992. On the date of his retirement, the first respondent held the post of Deputy Production Manager. At the time of his retirement, the first respondent was paid his retiral dues which inter alia consisted of gratuity in the amount of Rs. 56,270/- including an amount of Rs. 6,270/- which was transferred by the Government of Maharashtra to the petitioner when the petitioner was set up in the year 1975 as a corporate body in pursuance to a decision of the State Government. The proceedings in the present case arose out of an application filed by the first respondent before the Labour Court under section 33C(2) claiming that he was entitled to a total payment of gratuity of Rs. 1,04,940/-. The first respondent accordingly claimed the difference between what he asserted was his entitlement and the amount that he was actually paid. The Labour Court allowed the application in part by its order dated 25th September, 2003 holding that the first respondent was entitled to receive a balance of Rs. 43,730/- by way of gratuity from the petitioner. That has resulted in the institution of the present proceedings under Article 226 of the Constitution.
3. The Haffkine Institute at Mumbai was till 31st August, 1973 functioning as a Department of the Government of Maharashtra. Under a Government Resolution dated 26th November, 1973, the Government initially decided to bifurcate Haffkine Institute into two autonomous bodies viz. Haffkine Institute for Training, Research and Testing and Haffkine Bio-Pharmaceutical Corporation Limited. Accordingly, a Government Resolution was issued on 30th April, 1975 by which the State Government decided that Haffkine Institute as a Department of the State Government would stand closed and a new institute and Corporation would start functioning respectively with effect from 1st September, 1975. The petitioner is a company incorporated under the Companies Act, 1956 in pursuance of the decision of the State Government. Clause 4 of the Government Resolution dated 30th April, 1975 provided that the Government servants who were engaged by the erstwhile Haffkine Institute would upon being appointed to the new institute or Corporation, as the case may be, be absorbed on conditions of service which "should not be less favourable than their existing terms and conditions of service". Clause 4 of the Government Resolution provided as follows :
"On discharge from the Government Service the Government servants concerned should be provided, with effect from the said posts in the new Institute or Corporation, as the case may be in the same scale and allowances at present admissible to them. On such appointment their terms and conditions of service under the new Institute or Corporation should not be less favourable than their existing terms and conditions of service and in particular, their terms and conditions pertaining to their existing scales of pay and allowances, pensionary benefits, provident fund, leave, medical benefits, facility to continue in Government accommodation and other benefits shall be protected as specified in Appendix "A" to this G.R. However, such a protection shall not extend to matters pertaining to their future promotions, which will be governed by the rules and regulations made by their new employers. The service rendered by them under Government will count for their pensionary and all other benefits as if it was a service rendered under the new body."
4. Under clause 6 all employees were given an option either to opt for appointment under the new institute or Corporation. Clause 1 of Appendix A to the Government Resolution was
