Point of law: If employee claims DCRG under the KSR, the amount of gratuity will be determined under Rule 68 of Part III of the KSR, subject to the maximum prescribed thereunder.

JUDGMENT :

1. The petitioner retired as Regional Engineer from the Kerala State Housing Board (for short, 'the Board') on 31.05.2002. The 3rd respondent, the Secretary of the Board, by proceedings dated 20.05.2006, sanctioned the pensionary benefits of the petitioner; but withheld his DCRG amounting to Rs.2,57,400/- and also the last pay for the month of May, 2002 amounting to Rs.21,712/- towards his liability on account of audit objections. Aggrieved by the withholding of DCRG, the petitioner approached this Court and this Court, by Ext.P1 judgment, directed the Board to disburse the DCRG withheld, together with the salary for the month May, 2002 within a period of one month from the date of receipt of the judgment. The entitlement of the petitioner to claim interest for the delay in disbursement of DCRG and pay for last month was left open. Pursuant to Ext.P1 judgment, the Secretary of the Board, by Ext.P2 proceedings dated 04.04.2012, accorded sanction for payment of DCRG and the last month's pay.

2. According to the petitioner, the DCRG was determined and disbursed to him as per the 'then existing rule' and in view of the amendment introduced to section 4(3) of the Payment of Gratuity Act, 1972 by Act 15 of 2010 with effect from 17.05.2010, he is entitled to the maximum gratuity of Rs.10,00,000/- (Ten lakhs). Therefore, the petitioner has filed this writ petition for direction to the respondents to disburse the DCRG as provided under section 4(3) of the Payment of Gratuity Act, 1972, amended by Act 15 of 2010 and for 9% interest for 9 years and 11 months on the amount of gratuity.

3. Heard counsel on both sides.

4. The petitioner who was an employee of the Board is regulated by the Kerala State Housing Board Employees' (Pension and other Retirement Benefits) Regulations, 1990. Regulation 4 of the said Regulations provides that the rules contained in Part III of Kerala Service Rules for the time being in force and the decisions, rulings and notifications given or issued by the Government of Kerala from time to time except those specified in the schedule appended to the Regulations, shall mutatis mutandis apply to all the employees of the Board for regulating their pension and other retirement benefits. Rule 68 of Part III of the KSR deals with the amount of gratuity payable to an employee. No doubt, the petitioner is an employee coming within the ambit of section 2(e) of the Payment of Gratuity Act, 1972. Though he is governed by the provisions of the Kerala Service Rules, section 14 of the Payment of Gratuity Act, 1972 provides that the provisions of the Payment of Gratuity Act and the rules made thereunder shall have overriding effect on other enactments. The Government of Kerala has not exempted the Board from the operation of the provisions of the Payment of Gratuity Act, 1972 invoking its powers under section 5 of the Act. In view of the overriding provisions contained in section 4(3) of the Payment of Gratuity Act, 1972, the employees of the Board can claim gratuity in terms of section 4(3) thereof, however, in such circumstances, they cannot claim gratuity available under the KSR.

5. If the employee claims gratuity under the Payment of Gratuity Act, 1972, section 4 provides for payment of gratuity at the rate of 15 days’ wages for each completed year of service subject to a maximum as may be notified by the Central Government from time to time under sub-section 3. If the employee claims DCRG under the KSR, the amount of gratuity will be determined under Rule 68 of Part III of the KSR, subject to the maximum prescribed thereunder. The amount of gratuity will be one half of the “emoluments” of an employee for each completed year of qualifying service subject to a maximum of 16½ times the “emoluments”.

6. As per section 4 of the Payment of Gratuity Act, 1972, the gratuity shall be payable to an employee on the termination of his employment. The employment of the petitioner was terminated on 31.05.2002 on his superannuation f