Gratuity should be calculated based on the definition of 'wages' under the Payment of Gratuity Act, 1972, which includes only basic pay and dearness allowance, excluding other allowances.

Subramonium Prasad, J.

Instant writ appeal is directed against the order dated 20.02.2018 passed by a learned single Judge of this court in W.P. No.27527 of 2017. The learned single Judge, by the order impugned herein, has upheld the order passed by the Joint Commissioner of Labour, Chennai, which is the Appellate Authority under the Payment of Gratuity Act, 1972, which in turn, has confirmed the order passed by the Controlling Authority (Assistant Commissioner of Labour) under Payment of Gratuity Act, 1972.

2. Facts leading to the present appeal, are that the appellant, joined M/s.Sri Gokulam Chit & Finance Co (P) Ltd, having their Corporate Office at No.66, Arcot Road, Kodambakkam, Chennai - 600 024, on 26.12.1989. He resigned on 17.05.2012. He had put in about 22 years 4 months and 22 days service. His last drawn salary was Rs.31,000/-. The break-up figures of his salary are as under :

Basic	6,800/-
D.A.	6,150/-
H.R.A.	8,000/-
T.A.	5,900/-
C.C.A.	4,150/-
	31,000/-

3. On his resignation, the Management paid him Rs.1,64,365/- towards his gratuity. The amount was calculated as per Section 4 of the Payment of the Gratuity Act, 1972, as under :

Rs.12,950 x 15 x 22/ 26 = Rs.1,64,365/-

4. The appellant challenged this calculation, contending that his salary was Rs.31,000/- and gratuity could not have been calculated on Rs.12,950/-. His contention is that if salary is taken as Rs.31,000/-, the Management has to pay him a gratuity amount of Rs.3,93,641/-.

5. The appellant herein, therefore, approached the Controlling Authority under the Payment of Gratuity Act, 1972, for correct determination of the amount of gratuity under Section 7(4) of the said Act. The submission of the petitioner was rejected.

6. Aggrieved by the order of the Controlling Authority, an appeal under Section 7(7) of the Payment of Gratuity Act, 1972, was preferred before the Joint Commissioner of Labour, Chennai, who also rejected the same. The matter was taken to this court, by filing writ petition No.27527 of 2017. The writ court, maintained the orders of the Authorities below.

7. As against the order of the writ court dated 20.02.2018 made in W.P. No.27527 of 2017, instant writ appeal has been filed.

8. We heard Mr. V.P. Sreedharan, party-in-person and perused the materials available on record.

9. Wages under the Payment of Gratuity Act, 1972, has been defined in Section 2(s), which reads as under :

"(s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance."

10. Section 4 of the Payment of Gratuity Act, 1972, mandates payment of gratuity to an employee on the termination of his employment, after he has rendered continuous service for not less than five years. Section 4 of Payment of Gratuity Act, 1972, reads as under :

4. Payment of Gratuity.- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,-

(a) on his superannuation, or

(b) on his retirement or resignation,

(c) on his death or disablement due to accident or disease :

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

[Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is minor, the share of such minor, shall be deposited with the Controlling Authority who shall invest the