Only basic wages and dearness allowance are considered for gratuity calculations under the Payment of Gratuity Act, excluding special allowances.

ORAL ORDER

1. This petition is filed under Articles 226 and 227 of the Constitution of India with the following prayers:

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(A) That Your Lordships be pleased to issue an order, direction and/or writ in the nature of certiorary and/or any other appropriate writ, order or direction, quashing and setting aside the impugned order dated 3-6-2023 marked ANN.B, well the as Appellate order Authority passed by dated as the 4-5-2024 marked ANN.D, being illegal, perverse and against the provisions of Payment of Gratuity Act and be pleased to direct the respondent to pay the gratuity amount as per the application filed by petitioner being Form.N on 21-7-2022;

(B) That Your Lordships be further pleased to direct the respondent to deposit the amount of Rs.44,265/- with 10% simple interest before this Hon’ble Court;

(C) Any other and such further relief as the Hon’ble Court deems fit and proper in the interest of justice.”

2. It is the case of the petitioner that the petitioner was appointed with the respondent on 18.02.2009 and is retired on attaining the age of superannuation on 31.05.2022. As the amount of gratuity is not paid, the petitioner has approached the controlling authority by filing the application under the Payment of Gratuity Act being application No.630 of 2022. Along with the application, the petitioner has also submitted the Form No.’I’ and the same was sent to the respondent- Management as well. It is claimed by the petitioner that he is entitled for the gratuity amount of Rs.2,30,827/- as per Form ‘I’ however, learned controlling authority has passed an order directing the respondent-Management to pay the amount of Rs.44,265/- with 10% interest on 03.06.2023. The above order was challenged before learned appellate authority, who at the end has confirmed the order passed by the learned controlling authority and dismissed the appeal vide order dated 04.05.2024, which is the subject matter of challenge before this Court.

3. Heard the learned advocate Mr.U.T.Mishra for the petitioner.

4. Learned advocate Mr.Mishra submits that it is true that while calculating the gratuity, the basic wages as well as dearness allowance are to be considered however, as there was no dearness allowance was given by the present respondent-Management, the special allowances which are given could have considered as a dearness allowance and gratuity could have calculated on that amount. Learned advocate Mr.Mishra submits that as per the Form ‘N’ the amount, which is stated as wages is Rs.30,377/- however, both the authorities have considered the basic allowance of Rs.5,900/- and held that the petitioner is entitled for the amount of Rs.44,265/- only against the claim of Rs.2,30,827/-.

4.1. Learned advocate Mr.Mishra submits that with a view to deprive the benefit of the gratuity, which would include the dearness allowance, respondent- Management by adopting the smart tactics has granted the amount considering the same as a special allowance. Learned advocate Mr.Mishra submits that both the authorities have committed an error in not considering the claim of the present petitioner qua the special allowances and therefore, the order passed by the learned controlling authority as well as learned appellate authority are required to be set aside and the petition is required to be dismissed.

5. Considering the above submissions, moot question arise before the Court is that, whether the special allowance can be considered as a dearness allowance while calculating the gratuity under the Payment of Gratuity Act . The definition of charges as per Section 2(s) of the Payment of Gratuity Act is required to be referred which is reproduced hereinbelow for ready reference.

“2(s)."wages" means all emoluments wh