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2010 Supreme(Bom) 793
2010(4) ALL MR 844
IN THE HIGH COURT OF JUDICATURE AT BOMBAY (PANAJI BENCH)
N. A. BRITTO, J.
State Bank of India – Appellant
Versus
Shri. Laxmikant Vithal Palekar & Ors. – Respondents
Writ Petition No.248 of 2009
Decided on : 16th June, 2010.
Shri. M. S. SONAK, Advocate for the Petitioner. Shri. L. V. P ALEKAR, Respondent No.1 in-person.
Headnote:Payment of Gratuity Act, 1972 - Sections 2, 3 and 4 Payment of Gratuity (Central) Rules, 1972, Rule 10 Constitution of India, Article 226 Writ petition Petitioner/employer challenging order dated 30.1.2009 of Appellate Authority/respondent-2, modifying order of Controlling Authority dated 30.5.2008 by which employee/respondent-1 held entitled to Rs. 14,492/- being difference in gratuity Respondent-1/employee of petitioner-State Bank of India retired under V.R.S. w.e.f. 31.3.2001 Received amount of gratuity without any protest or demur After lapse of more than 5 years employee claimed deficit in payment of gratuity before Controlling Authority Delay condoned without showing any sufficient cause - Held - Conclusions arrived at by both Authorities below in condoning delay in filing application by employee in form-N perverse and illegal Both allowances; fixed personal allowance/pay as well as compensatory allowance to be included within expression "other allowances" as defined under Section 2(s) of Act Not form part of wages for computing gratuity Impugned orders of Authorities below set aside Application of employee/ respondent-1 dismissed Petition Allowed.
Payment of Gratuity Act, 1972 - Section 2(s) Payment of Gratuity (Central) Rules, 1972, Rule 10 Payment of gratuity Respondent retired under voluntary retirement scheme Payment of gratuity accepted without any objection After five years filed objection in form N Claimed deficit in payment of gratuity Objections are to be filed in 90 days from date of occurrence in terms of Rule 10 of Payment of Gratuity (Central) Rules Petitioner contends delay was condoned without showing any good cause Casual statement made that there was discrepancy in calculation which came to his knowledge recently Cannot be accepted as an explanation for long delay Order condoning delay found as perverse Calculation done as per bipartite settlement Petition succeeds Order impugned set aside. The conclusions arrived at by both the authorities below in condoning the delay has to be considered as perverse and on this count alone the application of the employee to the Controlling Authority dated 17.5.2006 ought to have been dismissed.
It is exclusive in the sense that it excludes bonus, commission, house rent allowance, overtime wages and any other allowance. The contention of the petitioners is that fixed personal pay of Rs. 615/- as well as special compensatory allowance of Rs. 550/- could not have been considered as wages for the computation of gratuity payable to the employee as they are clearly excluded. For the purpose of calculating gratuity, ignoring "conveyance allowance" and "site allowance" which formed the part of the total monthly emoluments on the specious ground that if only basic wages are allowed for contribution to P.F. and for payment of gratuity than the clever employers will adopt a practice in which a minimum payment will be paid as basic (pay) and the balance amount (will be paid) by way of other allowances which will deprive the employees of due legitimate retiral benefits.
The approach of the Appellate Authority in including both fixed personal allowance because its nomenclature was changed to fix personal pay and special compensatory allowance to wages for computing gratuity, which were otherwise payable on regular basis, cannot be accepted.
A perusal of the said decision does not show that it is of any assistance to the case of the employee. Although fixed personal allowance or pay and special compensatory allowance would come within the expression of other allowances as defined under Section 2(s) of the Act, the petitioners by virtue of bipartite settlement of awards dated 30.1.1995 has thought fit to treat a part of fixed personal pay or allowance for the purpose of superannuation benefits which would come within the scope of sub-section (5) of Section 4 of the Act.
The petitioners are bound to succeed on both the counts, firstly because the application before the Controlling Authority was filed with much delay without any satisfactory explanation and, secondly both the allowances, namely fixed personal allowance/pay as well as special compensatory allowance had to be included within the expression "other allowances", as defined under Section 2(s) of the Act, and, therefore would not form part of wages for computing gratuity except to the component of fixed personal pay which was agreed to be included by virtue of the bipartite settlement/award.
2. This is an employer's writ petition and is directed against Order dated 30-1-2009 of the Appellate Authority (Respondent No.2) modifying the Order of the Controlling Authority dated 30-5-2008 (Respondent No.3) by which the Respondent No.1 (Employee, for short) has been held entitled to Rs.14,492/- being the difference in gratuity payable to Respondent No.1.
3. Some undisputed facts may be stated to dispose off this writ petition.
4. The Respondent No.1 was working as a Senior Assistant with the Petitioner-State Bank of India until his voluntary retirement on 31-3-2001. Respondent No.1 retired under Voluntary Retirement Scheme w.e.f. 31-3-2001, and was paid gratuity in the sum of Rs.3,03,007.00 which amount the Respondent No.1 received without any protest or demur.
5. Thereafter, on or about 9-5-2006 i.e. after a lapse of more than five years, the employee filed an application in form N before the Respondent No.3 i.e. Assistant Labour Commissioner(Central), Vasco-da-Gama claiming that there was deficit in the payment of gratuity which arose on account of the last drawn wage of the employee being computed at Rs.16,412-85 instead of Rs.17 ,556/-.
6. The Controlling Authority (Respondent No.3) and the Appellate Authority (Respondent No.2) are the authorities created under the Payment of Gratuity Act, 1972, and in terms of Rule 10 of the Payment of Gratuity (Central) Rules, 1972 an application in form N in relation to non-payment of gratuity or deficit in payment of gratuity is required to be filed within a period of 90 days from the date of the occurrence of the cause for the application. The proviso below Rule 10 gives discretion to the Controlling Authority to accept the application, after expiry of the specified period of 90 days in case sufficient cause is shown by the applicant.
7. Section 2(s) defines the expression "wages" to mean all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employments and which are paid or are payable to him in cash, and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
7-A. Section 3 deals with the appointment of a Controlling Authority as an authority responsible for the administration of the Act. Section 4 provides that gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than 5. years.
Sub-Section (2) of Section 4 provides that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the right of wages last drawn by the employee concerned:
Provided that daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in case of an employee who is not employed in a seasonal establishment and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season.
Sub-Section(3) of Section 4 provides that the amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.
Sub-Section (4) provides that for the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
8. Sub-Section (5) of Section 4, which is far more important, reads as follows: Nothing in this Section shall affect the right of an employee to receive better terms of gratuity under
