Special allowances are excluded from gratuity calculations under the Payment of Gratuity Act, 1972, as per its statutory definition of wages.

JUDGMENT :

1. Rule, returnable forthwith. Learning advocates for the respective parties waive service of notice of Rule. With the consent of all parties matter was heard finally.

2. Question arises for consideration before this court in the present petition is whether special allowances can be included while considering the amount of gratuity for the petitioner employee?

3. Facts need for answer to the above question is as under:

3.1. Petitioner, herein, was working with the respondent-Institute as a Professor of Forensic Medicine from 02.02.2011 with a consolidated salary of Rs.1,00,000/- per month as per Rules of the respondent Institute. On satisfactory completion of one year probation period, respondent institute issued the ofÏce order dated 02.02.2012 confirming the service of the petitioner. The petitioner was granted an annual increment as well as a revision of the pay scale from time to time, and lastly, he was paid monthly salary of Rs.4,10,562/- by the respondent Institute there. The petitioner gave voluntary resignation from the services of respondent Institute as a Professor and Head of Department of Forensic Medicine & Toxicology. On 12.06.2021, it was informed by the respondent institute that his resignation had been accepted and the petitioner would be relieved with effect from 12.06.2021 after working hours. A certificate was also issued on 12.06.2021 regarding completion of more than 10 years of service by the respondent-Institute. The petitioner made applications for receiving the amount of gratuity from the respondent institute. However, same was not paid. Therefore, an application was filed under the Payment of Gratuity Act, 1972, along with Form-I on 30.03.2022; however, no payment of the gratuity amount was made. Consequently, the petitioner submitted Form-N on 18.04.2022 to the learned controlling authority, claiming the amount of gratuity of Rs.20,00,000/- along with 10% interest. The application was numbered as Gratuity Application No.390 of 2022. The respondent submitted its written statement before the learned controlling authority on 14.07.2022.

3.2. Thereafter, learned advocate for the petitioner employee submitted a list of documents on 28.07.2022, particularly the appointment order, office order of confirmation in services, office order accepting his resignation and relieving him from the services, certificate and pays slips issued by the respondent institute. The Petitioner has also submitted his deposition on affidavit on 28.07.2022 and additional affidavit on 30.08.2022 before the learned controlling authority.

3.3. The respondent institute also submitted the deposition on affidavit of Mr.Ajit Poonamchand Shah, Assistant Officer, H.R. Administration, dated 14.11.2022, before the learned controlling authority, and he was cross examined by the learned advocate for the petitioner. Learned controlling authority allowed the application filed by the present petitioner by directing the respondent institute to pay Rs.18,67,850/- as gratuity with 10%, simple interest with effect from 20.04.2022 untill the payment is released, by considering the last drawn salary of Rs. 3,23,750/- per month.

3.4. Being aggrieved and dissatisfied with order passed by learned controlling Authority, the respondent institute preferred an appeal before the learned appellate Authority under the Payment Of Gratuity Act, 1972, which was numbered as appeal No.140 of 2023. The petitioner submitted his reply on 11.12.2023 before the appellate authority. The learned appellate authority after hearing the parties, partly allowed the appeal filed by the respondent vide order dated 03.07.2024, reducing the amount of gratuity payable to the petitioner from Rs.18,67,850/- to Rs.11,84,250/- with simple interest of 10% f