The entitlement to receive gratuity is not affected by dismissal if the dismissal is not for any act, wilful omission, or negligence causing damage or loss to the employer, as per Section 4(6) and Section 14 of the Payment of Gratuity Act.

1. Rule. Heard finally with the consent of the learned Counsel for the parties.

2. The petitioners – employer take exception to the order passed by the competent authority under the Payment of Gratuity Act, 1972 (for short the said Act) directing payment of a sum of Rs.1,80,000/- to the respondent No.1 with interest @ 10% per annum. This order has been confirmed in appeal by the appellate authority on 17-1-2014.

3. The facts in so far as the same are relevant for adjudicating the challenge as raised are that the respondent No.1 was employed as a Grader with the petitioners since 4-11-1978. He came to be dismissed from service on 23-5-2000. On 18-4-2011, he filed an application before the Controlling Authority praying that the employer be directed to pay him gratuity under provisions of the said Act. The employer opposed the aforesaid application on the ground that the same was time barred. The entitlement of the respondent No.1 to receive gratuity was also disputed. The Controlling Authority – respondent No.2 held that the respondent No.1 was entitled to receive the amount of gratuity by treating the amount of Rs.9000/- as last drawn salary. Hence, by order dated 1-6-2013, the petitioners were directed to pay an amount of Rs.1,80,000/- towards gratuity within a period of 30 days with interest at the rate of 10% per annum from 23-6-2000 till its realization. In appeal preferred by the petitioners under Section 7(7) of the said Act, the Appellate Authority negatived the challenge to aforesaid order and dismissed the appeal.

4. Smt. Neeta Jog, the learned Counsel appearing for the petitioners made twofold submissions. According to her, in terms of Rule 83 of the Maharashtra State Cooperative Tribal Development Corporation Service Rules if an employee was dismissed or removed from service, he was not eligible to receive amount of gratuity. It was submitted that as the respondent No.1 was governed by service conditions of the petitioner – Corporation, he was not entitled to receive the amount of gratuity. It was then submitted that on account of considerable delay in seeking payment of gratuity, the respondent No.1 was disentitled for any relief. It was submitted that though the respondent No.1 ceased to be in service from 23-5-2000, the application for payment of gratuity was filed on 18-4-2011. It was, therefore, urged that on account of aforesaid delay, the claim as made was barred by limitation and hence, both the authorities erred in holding that the respondent No.1 was entitled for grant of gratuity. In support of her submissions, the learned Counsel placed reliance upon judgment of the learned Single Judge of the Karnataka High Court in ShivalingappaVs. Management of Minerva Mills, Banglore and others, 2001 LIC 1138. The learned Counsel, therefore, submitted that orders under challenge deserve to be set aside.

5. Per contra, Shri A.N. Vastani, the learned Counsel appearing for the respondent No.1 supported the impugned orders. He submitted that provisions of Section 14 of the said Act have an overriding effect over anything that was inconsistent with provisions of the said Act. According to him, the entitlement of the respondent No.1 to receive gratuity which was a statutory right could not be taken away by relying upon provisions of Rule 83 of the Service Rules. In that regard he placed reliance upon judgment of the Supreme Court in Jaswant Singh Gill Vs. Bharat Coking Coal Ltd. & others 2007 (1) CLR 427. He then submitted that the services of the respondent No.1 had been dispensed with on account of absentism and it was not the case of the employer that the services of the respondent No.1 had been terminated for any act, wilful omission or negligence that caused any damage or loss to the employer. Hence, according to him, provisions of Section 4(6) of the said Act were inapplicable to the facts of the present case and the respondent No.1 could not be deprived of the amount of gratuity. In that regard, he placed relianc