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2025 Supreme(UK) 17

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL 
SUBHASH UPADHYAY, J.
Ramesh Chandra Sharma (Since Deceased); Smt. Vijay Lakshmi W/o Late Ramesh Chandra Sharma - Appellant 
Versus
Uttarakhand Transport Corporation (UTC) and Another - Respondents
Writ Petition Service Single No. 11 of 2017 , Writ Petition Service Single No. 13 of 2017
Decided On : 21-11-2025
Advocates Appeared :
For the Appellants : Mr. Amar Murti Shukla, Ms. Gyan Mati Kushwaha
For the Respondent : Mr. Ashish Joshi

Employees reinstated with continuity in service are entitled to gratuity for the entire duration of employment, including the period post-termination, as per statutory provisions.

Headnote:(A) Payment of Gratuity Act, 1972 - Sections 2(c), 2(A), 4(1) and 4(2) - The petitioners were reinstated in service with continuity, entitled to gratuity for entire service period without break - Reinstatement implies the employee is to be treated as if continuously served - Employer's non-payment of gratuity due to misinterpretation of service continuity is illegal (Paras 11, 20, 21).

(B) The action of the employer in treating the period post-termination as break in service, when the termination was held undue, cannot be sustained. Liability to pay gratuity includes entire service period including reinstated duration (Paras 21, 22).

(C) Benefits of Assured Career Progression (ACP) were not demanded adequately, leaving determination with authorities. (Paras 24, 25).

Facts of the case:
The respondents terminated petitioners' services during the pendency of their claims, leading to a Labour Court award reinstating them with reduced back wages but denying full gratuity (other details omitted).

Findings of Court:
The respondents must pay noticed gratuity for the complete length of service along with interest (Paras 23).

Issues: Legality of employer treating reinstatement period as a break in service intentionally hindering gratuity due; entitlement to ACP undisputed yet unclaimed.

Ratio Decidendi: The court asserted continuity in service following reinstatement, emphasizing that denial of gratuity for the interrupted period of employment is unjustifiable (Paras 11, 21).

Result: Respondents ordered to pay gratuity for entire service duration with interest.

Table of Content
1. establishment of facts regarding service termination and reinstatement. (Para 1 , 2 , 3 , 4 , 5)
2. arguments concerning entitlement to gratuity and acp benefits. (Para 6 , 7 , 8 , 9 , 10)
3. court analysis on continuous service and gratuity eligibility. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21)
4. judgment on the illegality of non-payment of gratuity. (Para 22 , 23)
5. final orders on gratuity payment and acp representation. (Para 24 , 25 , 26 , 27)

JUDGMENT :

Subhash Upadhyay, J.

1. As both the Writ Petitions involve similar question of facts and law hence, the same are being decided by this common Judgment.

2. The petitioner in WPSS No.11/2017, Ramesh Chandra Sharma died during the pendency of the writ petition and has been substituted by his wife Smt. Vijay Lakshmi. The petitioners have filed the writ petitions claiming gratuity for the entire length of service and have further claimed benefit of Assured Career Progression (ACP) on completion of 26 years of service. Petitioner Ramesh Chandra Sharma was appointed as driver in the U.P. State Road Transport Corporation on 07.12.1986 and his services were terminated vide order dated 28.12.1991.

3. Petitioner in WPPS No.13/2017, Suresh Chand was appointed as Conductor in U.P. State Road Transport Corporation on 31.01.1980 and his services were also terminated vide order dated 28.12.1991.

4. The said order of termination was challenged by the petitioners before the learned Labour Court, Haldwani, District Nainital and the learned Labour Court vide order dated 30.06.1999 allowed the said claim petition and passed an order of reinstatement of the petitioners with continuity of service along with 50% back wages. The said order was challenged by the employer in Civil Misc. Writ Petition No.30688 of 2000 and Civil Misc. Writ Petition No.30694 of 2000 before the Hon’ble Allahabad High Court and after creation of the State of Uttarakhand, the said writ petitions were transferred to this Court and the same were numbered as Writ Petition (M/S) No.1604 of 2001 and Writ Petition (M/S) No.1605 of 2001. The said writ petitions were partly allowed on 21.09.2005 and the order of reinstatement with continuity in service passed by the learned Labour Court was upheld but the back wages were reduced from 50% to 25%. Petitioner – Ramesh Chandra Sharma retired on 30.09.2015 and petitioner – Suresh Chand retired on 31.12.2012, however, gratuity for the entire period of service i.e. from appointment till retirement was not paid to the petitioners treating the period of termination till their reinstatement as break in service.

5. Thus, the petitioner Ramesh Chandra Sharma was not paid gratuity for the period of 10 years 7 months and 22 days and similarly, petitioner Suresh Chand was not paid the gratuity for the period of 11 years 11 months and 13 days treating the said period to be break in service and, accordingly, petitioners were not granted benefit of ACP on completion of 26 years of service.

6. Learned counsel for the petitioners submits that the learned Labour Court set aside the order of termination and the petitioners were reinstated in service with continuity of service along with 50% back wages and in this regard he refers to the operative portion of the award which reads as under:-

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