The main legal point established in the judgment is the jurisdiction of the controlling authority under the Payment of Gratuity Act to adjudicate disputes and the applicability of the settlement under Section 12(3) of the Industrial Disputes Act in determining gratuity payment.

S. Manikumar, J.

Challenge in this writ petition is to a common order, dated 22.4.2009, passed by the Appellate Authority under the Payment of Gratuity Act (The Joint Commissioner of Labour), Madurai, directing the petitioner Bank to pay the arrears of gratuity payable to the Respondents 2 to 53. The Special Officer/Joint Registrar of the Virudhunagar District Central Co-operative Bank Ltd., Virudhungar, the petitioner herein has submitted that Virudhunagar District Central Co-operative Bank is incorporated under the Tamil Nadu Co-operative Societies Act and the Rules made thereunder, and that the Bank is having registered by-laws and special by-laws, in respect of the service conditions of the employees, in accordance with the provisions of the Tamil Nadu Co-operative Societies Act.

2. According to the petitioner bank. Respondents 2 to 53, who were the employees of the petitioner Bank and retired from service, on attaining the age of superannuation on various dates and they have received the entire gratuity, due to them, as per the scheme viz., Group Gratuity (Cash Accumulation) Scheme, which is linked with Life Insurance Corporation of India.

3. It is the case of the petitioner that the Respondents 2 to 53 filed an application before the Assistant Commissioner of Labour, Madurai, the first respondent herein, claiming that they arc entitled to receive further amount of gratuity, notwithstanding the claim made already, as per the settlement, dated 5.3.1997, arrived at u/s 12(3) of the Industrial Disputes Act, which according to them, provides for more benefit than the Act.

4. As per Section 4(A) of the Payment of Gratuity Act, the petitioner Bank had framed a scheme viz., Group Gratuity Scheme linked with Life Insurance Corporation of India. It is submitted that as per the said scheme, an employee is entitled to get 15 days wages for every completed year of service, as gratuity, subject to a maximum of the amount, equaling to 20 months salary. The above said term emanated from the scheme in respect of payment of gratuity has been included in the settlement, dated 5.3.1997, arrived at, between the Bank and various Employees Unions, in accordance with Section 12(3) of the Industrial Disputes Act. Further the above term of the settlement also says that for the purpose of calculation of Gratuity, 26 days would be reckoned, as a month, not only for arriving at the pay, but also for calculation for the length of service.

5. It is the further case of the petitioner Bank that the Respondents 2 to 53 have filed applications before the Controlling Authority, viz., the first respondent herein, claiming difference of gratuity, relying on the above terms stated in the settlement. According to the petitioner Bank, the Respondents 2 to 53 were misconstrued the term of the settlement, as if every 26 days would form a month and as such, the calculation of length of service would be long year than the actual working years and that if such method is adopted, then a year with 365 days would have 14 months and the same would lead to absurdity.

6. The petitioner Bank has further stated that the Supreme Court in Digvijay Woollen Mills Ltd. Vs. Shri. Mahendra Prataprai Buch, (1980) 4 SCC 106 has held that in any factory, an employee never works for all the 30 days in a month, and he gets 4 Sundays in a month and that though a month is understood to mean 30 days, but the manner of calculating gratuity under the Act to the employee who works for 26 days, should be on the basis for what he gets for 26 working days. Reiterating the same view, the Hon'ble Apex Court in Jeewanlal (1929) Ltd. Vs. Appellate Authority under the Payment of Gratuity Act and Others, (1984) 4 SCC 356 has held that the "rate of fifteen days wages' of an employee mentioned in Section 4(2) has to be calculated by ascertaining his daily wages by dividing the monthly wages by 26 and multiplying it by 15.

7. According to the petitioner Bank, subsequent to the above judgments of the Hon