Employees are entitled to gratuity per the Payment of Gratuity Act, 1972 despite other internal regulations, unless an exemption is formally established.

JUDGMENT

Gaurang Kanth, J. The present Writ Petition emanates from the order dated 09.07.2004 ("Impugned order") passed by Respondent No. 2, i.e, Controlling Authority under the Payment of Gratuity Act, 1972, Office of Assistant Labor Commissioner, Central District Employment Office Bhawan, Pusa Campus, New Delhi in Case No. Gratuity/21/02/CD/1451 titled as Sh. Dharampal Singh, Traffic Supervisor v. M/s Delhi Transport Commissioner.

2. Vide the Impugned order, Respondent No.2 held that Respondent No.1 is entitled to the gratuity as per the Payment of Gratuity Act, 1972 ("the Act"). In view of the same, Respondent No.2 directed the Petitioner to pay Respondent No.1 the differential gratuity amount of Rs.61,987/- with an interest @ 10% from 01.02.2002 till the date of actual payment.

FACTS GERMANE TO THE PRESENT WRIT PETITION ARE AS FOLLOWS:

3. Respondent No.1 joined the service of the Petitioner as a Traffic Supervisor on 15.05.1962 and retired from the service on 31.12.2001. Pertinently the last drawn salary of Respondent No.1 was Rs.9,425/-.

4. It is the case of Respondent No.1 that after his retirement, he was entitled to be paid for a sum of Rs.2,17,500/- towards gratuity, whereas he was paid a sum of Rs.1,55,513/-. Aggrieved by the same, Respondent No.1 preferred his case before Respondent No.2.

5. Pursuant to that, Respondent No.1 filed his Statement of Claim before Respondent No.2 and claimed Rs.61,987/- towards the balance gratuity amount. The Petitioner filed its reply to the Statement of Claim stating that Respondent No.1 is entitled to a sum of Rs.1,55,513/- as his gratuity and the said amount was already released to him.

6. On the basis of the pleadings of the parties, Respondent No.2 framed the following issue:

"Whether the employee is (covered, and) entitled to receive payment under Payment of Gratuity Act 1972 if yes then what the necessary directions in this regard."

7. Both the parties adduced their respective evidence before Respondent No.2. Based on the documents and evidence adduced by the parties, Respondent No.2 held that Respondent No.1 is entitled to claim gratuity as per the Act. Respondent No.2 further directed the Petitioner to release Rs.61,987/- with 10% simple interest towards the differential amount of gratuity to Respondent No.1 from 01.02.2002 till the date of actual payment.

8. Aggrieved by the Impugned order, the Petitioner preferred the present Writ Petition challenging the Impugned order dated 09.07.2004.

SUBMISSIONS OF THE PETITIONER

9. Learned counsel for the Petitioner, Mr. Uday N. Tiwari initiated his arguments by submitting that the Impugned order is illegal and arbitrary.

10. He submitted that Respondent No. 1 was appointed as Traffic Supervisor on 15.05.1962 and retired from service on 31.12.2001. He was in service for 39 years 4 months and 28 days. His last drawn salary was Rs.9,425/-. Upon his retirement, the Petitioner calculated and paid the gratuity amount of Rs.1,55,513/- to Respondent No. 1 in terms of the Petitioner's Office Order No. 11 dated 06.06.1991 applicable to the case of Respondent No.1 and all other similarly situated employees of the Petitioner.

11. It is the contention of the learned counsel for the Petitioner, Mr.Tiwari, that Respondent No.2 lacks inherent jurisdiction. It is his case that the rules governing the service conditions of Respondent No. 1, viz., the Petitioner's Office Order dated 06.06.1991, clearly states that