The amendment to the Payment of Gratuity Act enhancing the gratuity ceiling is prospective and does not apply to employees who retired before its effective date.

ORDER :

Atul Sreedharan, J.

1. The present appeal has been preferred by the appellant who is aggrieved by the order dated 31.05.2018 passed by the learned Single Judge in several connected matters of which the lead case was SWP No. 305/2013 titled “Sunil Kumar Sharma Vs. The Deputy Labour Commissioner, Jammu and others”.

02. The brief facts of the case are as follows:-

03. The appellant herein retired from the service of the respondent-Bank on 28.02.2010. He was paid gratuity of Rs.3.5 lacs. The case of the appellant is that the Rules of the State Government would apply for the service conditions of the appellant and that the Payment of Gratuity Act, 1972 which was amended on 15.04.2009 but brought into effect from 24.05.2010 which amends sub section 3 of Section 4, whereby the amount of gratuity that was payable to an employee was given a maximum ceiling of Rs.10.00 lacs which was earlier Rs.3.5 lac s which was received by the appellant, is also applicable in the case of the appellant.

04. The case of the appellant was that he was entitled to the enhanced ceiling upto Rs.10.00lacs even though he had retired before the provision came into effect from 24.05.2010. As stated earlier hereinabove the appellant retired on 28.02.2010.

05. The appellant had filed a representation before the Bank and as no response was received, he filed an application before the Controlling Authority under the Payment of Gratuity Act, 1972 which was dismissed by the Authority on the ground that amendment raising the maximum ceiling of gratuity came into effect from 24.05.2010 and was prospective in application. Against the order of the Controlling Authority, the appellant preferred a statutory appeal before the Appellate Authority which was also dismissed on the same ground.

06. Learned Single Judge while considering this case, formulated three questions for consideration which are as follows:-

(a) Whether the petitioner was governed by the J&K Civil Services Regulation in the matter of payment of gratuity?

(b) Whether the Central Government Notification of enhancement of gratuity is ipso facto applicable to the employees of the Cooperative Bank registered under the State Cooperative Act?

(c) Whether the amendment to the Payment of Gratuity Act would apply to the petitioner who had retired prior to the amendment coming into force?

07. The learned Single Judge held as far as question (a) is concerned that the appellant is not governed by the J&K Civil Services Regulation, as far as (b) is concerned, the learned Single Judge held that the Central Government Notification (to be referred to in detail hereinafter) was not applicable to the employees of the Cooperative Bank who were registered under the State Cooperative Act and lastly, in (c) the learned Single Judge held that the amendment to the Payment of Gratuity Act enhancing the ceiling from Rs.3.5 lacs to Rs.10.00 lacs could not be applied retrospectively on the appellant as the same came into effect on 24.05.2010 after the appellant had retired.

08. Learned senior counsel appearing on behalf of the appellant has referred firstly to SRO 94 which was notified on 15.04.2009. Specific reference has been made to the proviso to clause 3 of SRO which reads as under:-

“Provided that w.e.f. 1.1.2006, the overall ceiling of the Death-cum-Retirement Gratuity shall be Rs. 10.00 lakhs.”

09. Learned senior counsel appearing on behalf of the appellant has referred to the notification of the Central Government which is Office Memorandum dated 02.09.2008 which referred to the amendment to the Payment of Gratuity Act and in clause 3.1 gives the date of effect from 01.01.2006 onwards. The Office Memorandum of 02.09.2008 was to implement the Central Government‟s decision based upon the recommendations of the Sixth Central Pay Commission-Revision of provisions regulating pension/gratuity/commutation of pension/Family pension/disability pension/ex-gratia lump-sum compensation. It is relevant to mention here that clause 2 of the Memor