Employer's obligation to pay gratuity within 30 days as per the Payment of Gratuity Act, 1972, and the ineffectiveness of government instructions contrary to statutory provisions.

Deepak Gupta, J.(Oral).

1. The petitioner by means of this writ petition has prayed that the respondents be directed to pay the revised gratuity at one go instead of in installments.

2. The undisputed facts are that the petitioner, who was employed with respondent No.2, H.P.State Forest Corporation, retired from service on 31.07.2008 from the post of Assistant Manager.

3. Revision of pay scales took place and these revised pay scales become applicable from 1.1.2006. The respondent-Corporation adopted the recommendations of the sixth pay commission in August, 2009 though w.e.f. 1.1.2006. On account of this revision of pay scales the gratuity of the petitioner had to be revised. The respondents has revised the gratuity of the petitioner in terms of the revised pay scales but has not released the entire amount to the petitioner. The stand of the respondent No.2 Corporation is that instructions have been received from the State of Himachal Pradesh that the arrears of gratuity should be released in installments. Reference has been made to the letter dated 29th March, 2010 wherein the Principal Secretary (Finance) to the Government of Himachal Pradesh has directed all concerned including the Corporation to pay the arrears in installments.

4. In my view no such instructions could have been issued by the State Government in the present case. The H.P.State Forest Corporation is an autonomous body. The gratuity being paid to the petitioner is not similar to the gratuity paid to the employees of the Government who get pension, etc. This gratuity being paid to the petitioner is in terms of the Payment of Gratuity Act, 1972. Section 7 (3) of the Act reads as follows:-

“The employer shall arrange to pay the amount of gratuity, within thirty days from the date it becomes payable to the person to whom the gratuity is payable.”

5. Thus, it is apparent that there is a statutory provision directing the employer to pay the amount of gratuity within 30 days from the date it becomes payable. Normally, the gratuity would become payable on retirement but since this is a case of revision of gratuity the revised gratuity became payable within 30 days of the Corporation making the revised scales applicable therein to its employees. The Government has no power to issue instructions which are contrary to statutory provisions and the instructions to the contrary will have no effect where gratuity has to be paid in accordance with the Payment of Gratuity Act, 1972. It is also interesting to note that even as per the record of the respondents sufficient funds are available with it for payment of gratuity in one go and the only ground why it has not released the gratuity is the aforesaid instruction.

6. In view of the above discussion, the petition is allowed and the respondent No.2 is directed to release the entire balance gratuity of the petitioner on or before 31st July, 2011 failing which it shall be liable to pay interest @ 9% on the same w.e.f. today till payment of the amount.