The calculation of gratuity for service beyond 30 years must be based on 26 days per month, as per the Payment of Gratuity Act and National Coal Wage Agreement.

JUDGMENT :

1. This writ petition has been filed for setting-aside the order dated 27.12.2017 (Annexure-9) passed in P.G. Appeal No. (18)/2017-A.7 by respondent no.2 under Payment of Gratuity Act, 1972 whereby the order dated 17.05.2017 (Annexure-5) in (P.G. Application) No. 36(78)/2015-E passed by the respondent no.3 has been modified and it has been held that gratuity of the petitioner for service beyond 30 years will be determined by taking one month as 26 days instead of 30 days as was held by the respondent no.3.

2. The sole point involved in the present case is –

Whether one month would be taken as 26 days (after deducting 4 Sundays) or it has to be taken as 30 days for calculation of gratuity relating to service rendered beyond years?

3. Foundational facts

a. The petitioner was engaged as casual loader by the respondent no.1 in the year 1973 and was absorbed on 10.09.1980. After completion of period of service of more than 30 years, he attained the age of superannuation on 30.06.2011.

b. The petitioner filed an application before the respondent no.3 for payment of differential gratuity amount of Rs. 2,16,956/-which was registered as PG Case No. 36/(78)/2015-E-4. The petition was allowed by the respondent no.3 and the employer (respondent no.1) was directed to pay a sum of Rs. 2,16,955/- in accordance with the provisions of section 4(5) of Payment of Gratuity Act, 1972 (hereinafter referred to as the Act of 1972).

c. The employer filed an appeal which was registered as PG Appeal No. 18/2017-A-7 and the appellate authority (respondent no.2) allowed the appeal in part by holding that the period of one month for service rendered beyond 30 years has to be taken as 26 days and not 30 days and the order of the controlling authority was accordingly modified. Consequently, the gratuity amount was reduced and the reduced amount has already been paid to the petitioner.

4. Arguments of the petitioner.

A. The learned counsel, while assailing the impugned appellate order, has submitted that the provision of section 4(5) of the Act of 1972 is applicable in the present case, but the impugned order has been passed as if the proceeding was under section 4(2) of the Act of 1972.

B. The learned counsel has submitted that under section 4 of the Act of 1972, there are two different provisions; one under section 4(2) and the other under section 4(5). He has submitted that as per the provisions of section 4(5) nothing in the section 4 shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.

C. The petitioner was seeking payment of gratuity in terms of Clause 9.1.4 of National Coal Wage Agreement No. III (NCWA-III). He submits that National Coal Wage Agreement has statutory force in terms of the judgment passed by the Hon'ble Supreme Court reported in (2007) 8 SCC 549 (Mohan Mahto Vs. Central Coal Field Ltd. and Others) and payment of gratuity in terms of Clause 9.1.4 was more beneficial to the petitioner.

D. As per Clause 9.1.4 of National Coal Wage Agreement (NCWA), gratuity amount for service rendered beyond 30 years shall be calculated at the rate of one month's wages last drawn by the employee for every completed year of service and there is no stipulation that one month would be calculated as 26 days after deducting the holidays (Sundays). It has been submitted that the term one month as mentioned in Clause 9.1.4 of NCWA has to be interpreted by golden rule of interpretation of statute and the plain meaning of the words mentioned therein is required to be considered. It has been submitted that as per the ordinary grammatical sense one month means 30 days and not 26 days for which a reference has been made to General Clauses Act [section 3(35)].

E. The controlling authority (respondent no.3), while passing the order was conscious of the fact that the Clause 9.1.4 of NCWA is a provision which would be covered by section 4(5) of the Act of 1972 and has accordingly calculated the