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2024 Supreme(Online)(MAD) 12092

HIGH COURT OF MADRAS
Honourable Mr Justice J.SATHYA NARAYANA PRASAD
S.SIVASHANMUGAM – Appellant
Versus
TAMILNADU ELECTRICITY – Respondent



Gratuity calculations must adhere to the principle of 26 working days per month, ensuring equitable treatment in light of established legal standards.

Headnote:

Gratuity - Writ Petition - Payment of Gratuity Act, 1972 - Section 5 - The Analysis discussed the miscalculation of gratuity based on service length and department policies, emphasizing the importance of proper calculation methods as prescribed in law, leading to a favorable decision for the petitioner.

Fact of the Case:

The petitioner, a retired employee of TANGEDCO, challenged the corporation's calculation of his gratuity, which considered insufficient years of service and incorrect allowance percentages, resulting in a lower final amount.

Finding of the Court:

The court found that TANGEDCO had miscalculated the petitioner’s gratuity and that the entire duration of service should be considered based on established legal precedents, particularly regarding the calculation of monthly wages.

Issues: Whether the respondent correctly calculated the gratuity based on the proper duration of service and applicable legal standards in light of the Payment of Gratuity Act.

Ratio Decidendi: The court held that gratuity must be calculated based on 26 working days per month rather than 30, aligning with Supreme Court directives and established practices, thereby correcting the petitioner’s gratuity amount.

Final Decision: The court directed TANGEDCO to pay the petitioner the balance gratuity amount of Rs.62,909/- along with interest.

O R D E R

This writ petition is filed for issuance of a Writ of Certiorarified Mandamus to quash the order of the respondent dated 25.02.2011 bearing proceedings Ni.Ku.No.1288/Nir.3/U.Tha.2/Ko.O.No.2011 in so far as wrongly arriving at the Gratuity bearing Proceedings No.1298/Nir.3/U.Tha.2/2011 and consequently direct the respondent to arrive at the gratuity payable by taking into account of 29 years of service rendered by the petitioner and arrive at the basic pension at Rs.11,470/-, pay arrears of commuted pension, and continue to pay the 2/3rd value of the basic pension.

2. The case of the petitioner is that he joined the Tamil Nadu Electricity Board on 24.07.1982, as an Assessor, which has now become the respondent Corporation (TANGEDCO). The petitioner was appointed on a permanent basis by a regular selection process and on a regular time scale of pay and appointment order dated 19.07.1992. Though it says that it is a temporary appointment for a period up to 30.11.1982, it was on a permanent basis and his services were regularized in due course. Thereafter, the petitioner gained promotions, and at the time of his retirement, he was working as Revenue Supervisor and has retired with effect from 28.02.2011, on attaining the age of superannuation.

3. Learned counsel for the petitioner would submit that the respondent Corporation (TANGEDCO), by order dated 25.02.2011, had arrived at the gratuity payable to the petitioner of Rs.4,57,366/-, and while calculating the gratuity, the respondent Corporation (TANGEDCO) had taken his service rendered as 27 years and 3 months instead of 28 years and 7 months (29 years). Further, the dearness allowance has been arrived at 45% instead of 51%, and in this process, gratuity had been wrongly calculated and a lesser amount had been arrived at. He further submitted that the respondent Corporation (TANGEDCO), while arriving at the basic pension, had arrived at Rs.10,514/- instead of Rs.11,470/-. Consequently, the commuted value of the pension and the 2/3rd pension have also been reduced. In this regard, he made a representation dated 04.07.2011, however, there was no reply. He has also made representation dated 10.08.2011, since no information was provided, he made application under RTI and in reply to the same, the respondent has been informed, as if the gratuity was calculated properly, that his service from 24.07.1982 to 30.11.1983, was on a contract basis, and only from 01.12.1983, he has been appointed on a regular basis, and therefore, his service is only 27 years and 3 months, that his dear allowance has been paid, that the basic pension has been correctly arrived at, and that 50% of the last drawn pay can be given as a basic pension only if he has rendered 30 years of service. Thus, the respondent Corporation (TANGEDCO) has declined to pay the correct gratuity, pension, and commuted value of pension through the impugned order dated 25.02.2011. Aggrieved by the impugned order passed by the respondent Corporation (TANGEDCO), the petitioner has come forward with the present writ petition.

4. Learned counsel would further submit that the contention of the respondent Corporation (TANGEDCO) that the service rendered from 24.07.1982 to 30.11.1983 was a contract service is without any basis. The petitioner had been regularly appointed in a time scale from 24.07.1982, though terming it to be for a fixed period. Only because the appointment was not for a fixed period, the petitioner was continued as an Assessor. Therefore, the entire service has to be taken into account for calculating gratuity.

5. Learned counsel further submitted that in the case of one K.Sivalingam, who has also been appointed as an Assessor on a temporary basis for a fixed period, on his retirement, the respondent taken the service rendered for the temporary period for the purpose of calculating the gratuity. While so, different yardsticks cannot be adopted in respect of the petitioner and take away two years of service render

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