2003 Supreme(Guj) 493

Gujarat High Court
Judgename :RAVI R.TRIPATHI
GUJARAT STATE EXPORT CORPORATION LIMITED - Appellant
Versus
MADHUSUDAN L.KHANDWALA - Respondent
S.C.A. 8285 of 2001
Decided On : 09/01/2003

Headnote:

Companies Act, 1956 -Section 7 - Payment of Gratuity Act, 1972 -Petitioner corporation on attaining the age of superannuation having put in 32 years and 4 months of service. 1. 1 the respondent in Special Civil Application No. 9660 of 2002 was lastly working as Deputy Manager and retired from service on attaining the age of superannuation having put in 29 years of service. 1. 2 the respondent in Special Civil Application No. 9703 of 2002 had joined the service of the petitioner corporation and retired on attaining the age of superannuation when he was working as Senior Assistant after having put in 28 years of service. In all these petitions a common question arises for consideration of the Court, viz. whether the Controlling Authority under the Payment of Gratuity Act, 1972 has jurisdiction to enforce a private scheme of gratuity and direct payment of differential amount, if under the private scheme there is entitlement to higher amount of gratuity. The answer to the aforesaid question is to be given in light of the provisions of Clauses (a) and (b) of subsection (4) of section 7, which read as under: " xxxxx (a) if there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of or in relation to an employe for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity. (b) where there is a dispute with regard to any matter or matters specified in clause (a) the employer or employee or any other person raising dispute may make an application to the controlling authority for deciding the dispute. "ON a combined reading of the aforesaid two clauses it is clear that the controlling authority is required to adjudicate the claim of the gratuity payable to an employee under the Act. There is no scope for a debate on the point that there can be a private scheme. The only requirement for such scheme is that it should be more beneficial than the provisions of the Act. There is no doubt that if an employer agrees to provide more benefits than the benefits flowing from the Act he can always have private scheme but then whether the employees can approach the Controlling Authority under the Act for enforcement of such additional benefits. So far as enforcement of the minimum benefits which flow from the Act are concerned an employee can approach the Controlling Authority and the Controlling Authority in view of the aforesaid provisions of law can enforce such rights of the employees –Held IN the present case the Controlling Authority could have directed the petitioner corporation to grant benefit to the extent the same was flowing from the provisions of the Act and should have restrained itself from ordering payment on the basis of private scheme. When the private scheme provides for payment of one month salary for each completed year of service it has reason to provide for maximum limit also. If the provisions of the private scheme are less beneficial, then under the provisions of the Act an employee can approach the Controlling Authority and the Controlling Authority can order enforcement of rights flowing from the Act. In the present case the respondent in Special Civil Application No. 8285 of 2001 is concerned he has put in 32 years of service. Under the provisions of the Act he is entitled to get 16 months salary. To that extent his claim for payment of 16 months salary deserves to be allowed. IN the result, petitions succeed. The judgements and orders of the Controlling Authority as confirmed by the appellate authority in all these petitions are hereby quashed and set aside. However, the petitioner corporation is directed to pay the amount of gratuity to the respondents on the basis of private scheme as it stood on the day when the right accrued in favour of the employees or on the basis of Payment of Gratuity Act whichever is more beneficial to the employee. Rule is made absolute to the aforesaid extent only. No order as to costs –Petition is Allowed.