JUDGMENT :

Jahangir Jamshed Munir, J.

1. The question involved in this writ petition is: whether interim relief being paid to an employee immediately before his retirement would fall within the meaning of 'wages' defined under Section 25 of the Payment of Gratuity Act, 1972 for the purpose of calculation of his gratuity, under Section 4(2)?

2. The third respondent was employed with the petitioner-corporation in the month of December, 1972 and retired voluntarily from service in the month of July, 2005. He opted to retire under the Voluntary Retirement Scheme offered by the Corporation (for short the 'VRS'). At the time of his retirement in the month of July, 2005 respondent No. 3 held the post of Assistant Manager (Finance) with the petitioner corporation.

3. The case of the petitioner in short is that at the time of his voluntary retirement, he was paid gratuity that was calculated taking into consideration his basic pay + dearness allowance. However, a sum of Rs. 800/- per month that he was in receipt of at that time, by way of interim relief, was not included in his wages last drawn for the purpose of calculation of his gratuity. Respondent No. 3, admittedly rendered 32 years of service and taking the said respondent's wages last drawn to be his basic pay at the time, that is a sum of Rs. 3500/- per month + dearness allowance, that at the relevant time was at sum of Rs. 10,606/-, his wages last drawn were determined at a figure of Rs. 14,106/-. In whatever manner gratuity was calculated, the petitioner corporation reckoned the sum payable to the third respondent in gratuity at a figure of Rs. 2,22,222/-. This figure in whatever manner calculated by the petitioner according to their rules, and not in accordance with the Payment of Gratuity Act, 1972 (for short the 'Act'), did not take into reckoning a sum of Rs. 800/- per month, that respondent No. 3 received by way of interim relief.

4. Aggrieved, the third respondent moved an application to the Controlling Authority, Payment of Gratuity Act (for short the 'Controlling Authority'), dated 10.5.2012, in substance claiming that he was entitled to receive gratuity in accordance with Section 4(2) of the Act, where the sum of interim relief that he was receiving as part of his wages last drawn, is required to be included while determining the gratuity payable. It was claimed that including the sum of interim relief that the third respondent was in receipt of when he retired, gratuity payable to him would workout to a figure of Rs. 2,83,787/-. Thus, deducting the sum of Rs. 2,29,222/- paid to the third respondent at the time of his voluntary retirement in gratuity, a balance of Rs. 54,565/- is still outstanding, that he is entitled to receive from the petitioners under Section 4(2) of the Act.

5. The aforesaid application was registered before the Controlling Authority as PG Case No. 57 of 2012. A reply dated 5.12.2012, signed by the Chief Manager, Law Department, of the petitioner was filed in opposition to the third respondent's claim. A further reply dated 15.5.2013 was filed on behalf of the petitioner. A rejoinder was filed on behalf of the third respondent, reiterating his claim about entitlement to difference in the sum of gratuity payable to him, in accordance with Section 4(2) of the Act. The Controlling Authority allowed the petitioner's application vide order dated 18.1.2016, calculating the gratuity payable, by including the sum of interim relief for the purpose of reckoning wages last drawn by the third respondent and determining the same at a figure of Rs. 2,83,787/-, in accordance with the provisions of Section 4(2) of the Act, read with Rule 10(1) of the U.P. Payment of Gratuity Rules, 1975 (for short the 'Rules').

6. The petitioners preferred an appeal from the aforesaid order to the Appellate Authority under the Act, invoking the provisions of Section 7(7) and praying that the order of the Controlling Authority, dated 18.1.2016 be set aside. The aforesaid appeal was hea