The entitlement to gratuity under amended provisions pertains to revisions of remuneration, asserting that benefits granted previously cannot be denied based on affordability post-amendment.

(Judgment of the Court was delivered by S.M.Subramaniam J.)

The present Intra Court Appeals under Clause-15 of the Letters Patent have been instituted to assail the Writ Order dated 15.03.2022 in W.P.Nos.32505 and 32297 of 2012.

2. Madras Fertilizers Limited has filed the present Writ Appeals mainly on the ground that the Payment of Gratuity Act, 1972 has been amended to substitute words "Rupees Three Lakhs and Fifty Thousand" with words "Rupees Ten Lakhs" under sub-Section 3 of Section 4 of the Act. An Office Memorandum was notified on 24.05.2010 and Respondents / Employees retired from service prior to the amendment. Therefore, their claim seeking gratuity amount of Rs.10,00,000/- is untenable.

3. Mr.Jayesh B.Dolia, learned Senior Counsel appearing for the Appellant would contend that when the Office Memorandum was notified on 24.05.2010, the said Memorandum would not have retrospective application so as to claim enhanced gratuity amount in respect of the employees, who retired prior to the amendment. Learned Senior Counsel drew the attention of this Court with reference to the Government of India Office Memorandum dated 26.11.2008, wherein revision of scale of pay with effect from 01.01.2007 was granted to Board level and below Board Level Executives and non- Unionised Supervisors in Central Public Sector Enterprises (CPSEs). The appellant had already extended the benefit of revised scale of pay and all other benefits under the said Scheme. Therefore, the gratuity alone has been denied on the ground of affordability, which is contemplated under the very same Government Office Memorandum dated 26.11.2008. He would rely on Clause 3 of the said Memorandum dated 26.11.2008 to establish that affordability for implementation of pay revision is the discretion of the appellant and they have exercised the discretion only to the extent of limiting the gratuity. Therefore, Writ Court has committed an error in not considering the same.

4. Mr.K.S.Viswanathan, learned Senior Counsel assisted by Mrs.T.Hemalatha, learned counsel for R1, 3 to 5 and 7 to 20 would oppose, by stating that the part implementation of Office Memorandum dated 26.11.2008 would defeat the purpose and objectives of the Scheme. Admittedly, respondent employees received revised scale of pay and all other benefits granted in the said Memorandum. Once revised scale of pay and the consequential monetary benefits are ordered by the appellant, they cannot deny gratuity alone, since gratuity is calculated based on the number of years of services rendered as well as the revised scale of pay received by employees. Gratuity being a consequential benefit arouse on account of revision of pay effected pursuant to the Office Memorandum dated 26.11.2008, Writ Court has rightly considered the issue and thus, the present appeals are to be rejected.

5. This Court has considered the rival submissions made between the parties to the lis.

6. Clause-13 of the Office Memorandum dated 26.11.2008 reads as under:

"13. Gratuity: The ceiling of gratuity of the executives and non-unionised supervisors of the CPSEs would be raised to Rs.10 lakhs with effect from 01.01.2007."

7. Clause-3 speaks about affordability for implementation of pay revision. Clause-17 is about the Issue of Presidential Directive, effective date of implementation and payment of allowances, etc. Once revised scale of pay has been given without reference to the affordability under Clause-3 r/w Clause-17, then the benefit of gratuity under Clause-13 cannot be denied to employees, more specifically, Clause-3 is all about revision of pay scale. Once affordability has not been raised for revising the scale of pa