The office memorandum dated 26.11.2008 is binding on the Corporation and constitutes an agreement under Section 4(5) of the Payment of Gratuity Act, 1972.

JUDGMENT :

Alok Aradhe, CJ.

1. Mr. G.Vidyasagar, learned Senior Counsel representing Ms. K.Udaya Sri, learned counsel for the appellant.

Mr. B.Narasimha Sharma, learned Additional Solicitor General of India representing Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India for respondent Nos.1 and 2.

Mr. P.V.Krishnaiah, learned counsel for respondent Nos.3 to 5.

2. This intra court appeal emanates from an order dated 03.06.2024 passed in W.P.No.15840 of 2018 by the learned Single Judge, by which writ petition preferred by the appellant has been dismissed and orders of the Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972 (hereinafter referred to as "the Act") have been upheld. In order to appreciate the grievance of the appellant, relevant facts need mention which are stated infra.

3. The appellant, namely Electronic Corporation of India Limited (hereinafter referred to as 'the Corporation') is a central public sector undertaking. The employees of the Corporation, in respect of payment of gratuity, are governed by the Act.

4. The Government of India, Ministry of Heavy Industries and Public Enterprises, had set up a Pay Revision Committee under the Chairmanship of former Judge of the Supreme Court of India to recommend revision of pay and allowances for the categories of employees following IDA pattern of pay scales. The aforesaid Committee submitted recommendations for pay revision due from 01.01.2007. The Government, after due consideration of the recommendations of the Pay Revision Committee, issued an office memorandum dated 26.11.2008, by which decision was taken to revise the pay scale, allowances as well as gratuity. The ceiling of gratuity of the executives and non-unionised supervisors of Central Public Sector Enterprises (CPSEs) was raised from Rs.3.50 lakhs to Rs.10.00 lakhs with effect from 01.01.2007. The Ministry of Heavy Industries and Public Enterprises, Government of India issued an office memorandum dated 02.04.2009 by which it was decided that the office memoranda dated 26.11.2008 and 09.02.2009 have to be viewed as a total package. It was further decided that pay revision package as communicated by earlier office memoranda along with aforesaid modifications would be applicable to all the CPSEs. It is further provided that the ceilings imposed under various items given in office memoranda dated 26.11.2008 and 09.02.2009 and the office memorandum dated 02.04.2009 are the maximum permissible limits. However, lower limits against these maximum permissible limits can be provided in the Presidential Directives depending upon affordability, capacity to pay and sustainability of all the concerned CPSEs.

5. The Board of Directors of the Corporation in its 226th meeting decided to maintain the ceiling limit of gratuity at Rs.3.50 lakhs, till the Gratuity Act is amended. The aforesaid resolution taken in 226th meeting was approved by the Board of the Corporation on 21.04.2009.

6. The Department of Atomic Energy by an order dated 01.05.2009 approved the decision taken by the Corporation in its meeting on 21.04.2009. The relevant extract of aforesaid order reads as under:

"(i) The pay revision of Board level executives and below Board level executives and non-unionized Supervisors of ECIL would be strictly in accordance with the guidelines contained in DPE O.M.No.2(70)/08- DPE (WC)-GL-DVI/03, dated 26.11.2008 and O.M.No.2(70)/08-DPE(WC)-GL-VII/09 dated02.04.2009. The revised pay scales will be effective from 01.01.2007.

(ii) No budgetary support will be provided to the company by the Government to meet the additional liability on account of pay revision at any point of time and it should be ensured that ECIL would be in a position to sustain the revised pay perpetually through its internal resource generation.

(iii) Payment of HRA based on the revised scales will be effective from 26.11.2008.

(iv) Perks and other allowances will be strictly subject to a maximum ceiling of 50% of basic p