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2016 Supreme(Bom) 988

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD
RAVINDRA V. GHUGE, J.
Baban – Appellant
Versus
The Estate Manager Maharashtra State Farming Corporation Ltd. – Respondent
W.P. No.4851 of 2016
Decided On : 11-08-2016

Advocates Appeared:
For the Appellant :Mr.A.S.Shelke, Advocate
For the Respondent:Mr.P.V.Barde, Advocate

Headnote:

Gratuity - Calculation of Days Worked - The Payment of Gratuity Act, 1972, Section 2(s), 2(b), 2(c), 2A, 4, 7, 8 - The court discussed the definition of 'wages', 'completed year of service', 'continuous service', and 'payment of gratuity' under the Act. It highlighted the provisions related to interruption in service and the determination of the amount of gratuity. The court also analyzed the impact of weekly holidays and national holidays on the calculation of days worked for gratuity eligibility. The judgment referenced legal principles from previous cases to support its decision on the calculation of gratuity based on days worked.

Fact of the Case:

The petitioner sought gratuity payment based on the calculation of days worked and pay scale revision. The court analyzed the petitioner's work history, pay scale revision, and the respondent's communication regarding gratuity payment. It also discussed the petitioner's refusal to accept the gratuity and the calculation of interest on the gratuity amount.

Finding of the Court:

The court found that the petitioner was entitled to gratuity from 1973 under the revised pay scale, and the amount from 1973 to 1990 would carry interest at 6% from 01/07/2012. The court quashed the impugned judgment and directed the respondent to verify and pay any shortfall in interest to the petitioner.

Issues: The issues involved the calculation of days worked for gratuity eligibility, pay scale revision, communication regarding gratuity payment, and the calculation of interest on the gratuity amount.

Ratio Decidendi: The court's decision was based on the interpretation of the Payment of Gratuity Act, 1972, and the impact of interruptions in service on gratuity eligibility. It also considered the petitioner's refusal to accept the gratuity and directed the respondent to verify and pay any shortfall in interest to the petitioner.

Final Decision: The petition was partly allowed, the impugned judgment was quashed, and the petitioner was entitled to gratuity from 1973 under the revised pay scale. The amount from 1973 to 1990 would carry interest at 6% from 01/07/2012. The respondent was directed to verify and pay any shortfall in interest to the petitioner.

JUDGMENT :

1. Rule. Rule made returnable forthwith and heard finally by the consent of the parties.

2. The petitioner is aggrieved by the judgment of the Appellate Authority dated 21/03/2016 delivered in Appeal (PGA) No.263/2016.

3. Mr. Shelke, learned Advocate for the petitioner submits that the issues which deserve consideration are as to whether the weekly holidays can be added to the days actually worked while calculating completion of 240 days in a calendar year for payment of gratuity, whether the revision in the pay scale with retrospective effect would entitle the petitioner for additional gratuity and whether interest component needs to be added in this case since the respondent has failed to pay the gratuity.

4. I have heard Mr. Shelke and Mr. Barde, learned Advocates for the petitioner and the respondent at length on 08/08/2016 and again today.

5. There is no dispute that a chart at page No.36 indicates the days actually worked by the petitioner. There is also no dispute that the petitioner has been working with the respondent from 1973-1974 and has superannuated on 31/05/2012. His last drawn wages were @ Rs.6,930/per month. A pay revision was introduced on 31/05/2015, which has been made effective under the 5th pay Commission from 01/01/2008. The petitioner was, therefore, benefited by the pay revision and there is no dispute on this count.

6. The dispute has its origin in the number of days worked and hence, the issue of the eligibility of the petitioner for claiming gratuity under the provisions of The Payment of Gratuity Act, 1972.

7. “Wages” under the said Act are defined under Section 2(s), which reads as under :

“wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment 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.”

8. “Completed year of service” and “continuous service” are defined u/s 2(b) and 2(c), which read as under :

“2(b) “completed year of service” means continuous service for one year ;

2(c) “continuous service” means continuous service as defined in Section 2A;”

9. The definition of “continuous service” will have to be read from Section 2A (1), which was introduced w.e.f. 11/02/1981 by Act 26 of 1984 and which reads as under :

“An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), layoff, strike or a lock out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.”

10. In the light of the above definitions, there can be no dispute that interruption in service on account of sickness or accident or leave or absence from duty without leave would not be considered as a break in service. Contingencies like layoff, strike or a lock out or cessation of work not due to any fault of the employee, whether it has interrupted his service or not, is also considered to be not an interruption in continuous service.

11. The “payment of gratuity” is defined u/s 4, which reads thus :

Section 4 Payment of gratuity

(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,-

a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

Provided tha































































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