Supreme Court - Daily Orders
Indian Overseas Bank vs The Regional Labour Commissioner (C) ... on 29 November, 2018
Bench: Ashok Bhushan, Indu Malhotra
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.197 OF 2010
INDIAN OVERSEAS BANK ...APPELLANT
Vs.
THE REGIONAL LABOUR COMMISSIONER (C)
AND APPELLATE AUTHORITY & ORS. ...RESPONDENTS
O R D E R
Heard learned counsel for the appellant-Bank as well as learned counsel for the respondents.
This appeal has been filed against the judgment and order dated 28th April, 2009 passed by the High Court of Judicature at Madras in Writ Appeal No.95 of 2008 whereby the High Court dismissed the appeal filed by the appellant-Bank.
The brief facts of the case necessary to be noticed for deciding the present appeal are as follows:
The third respondent joined the appellant-Bank on 30 th December, 1957 and retired as an officer of the bank on 31st May, 1994. The gratuity payable to the third respondent at the time of retirement as per Section 4(3) of the Payment of Gratuity Act, 1972 was Rs.1,00,000/-Signature Not Verified Digitally signed by ANITA MALHOTRA Date: 2018.12.05
(Rupees one lac) which was the maximum gratuity payable 16:51:28 IST Reason:1
under the Act in 1994 till substituted and increased to Rs.3,50,000/- in 1998 by an amendment, more than three years after the termination of his employment. A settlement was arrived at between the Indian Banks' Association and the Apex Level Officers Association. According to these terms of settlement, the payment of arrears of gratuity would be effective w.e.f. 1St November, 1994. The third respondent was paid his arrears of salary consequent upon revision w.e.f 1st July, 1993 till 31st May, 1994. As far as gratuity was concerned, the benefit of the revised salary was to be taken into account only for employees who retired on or after 1st November, 1994. The respondent No.3 was informed that his gratuity has been paid as per his last basic pay and nothing was due to him. The third respondent filed an application before the Controlling Authority claiming an amount of Rs.85,400/- with interest being the difference in gratuity based on the revised salary. The difference in cut-off date for gratuity was challenged by various similarly situated employees before the High Court of Madras. The High Court vide judgment dated 31st August, 2002 upheld the cut-off date 1st November, 1994 for gratuity. The Controlling Authority by order dated 21st 2 March, 2003 directed the payment of difference in gratuity based on the salary revision as Rs.85,400/-. The bank filed an appeal which was dismissed on 27th April, 2005. Thereafter the Writ Petition was filed before the High Court which was dismissed on 20th November, 2007. A Writ Appeal filed by the bank also met the same fate. Aggrieved by the aforesaid judgment, the Bank has come up in this appeal.
Learned counsel for the appellant contended that the cut-off date fixed for payment of gratuity, i.e. 1st November, 1994 was valid and had been upheld by the High Court in its earlier judgment which has been brought on record as Annexure-P-7. It is submitted that the mere fact that the revision of salary was effective w.e.f. 1st July, 1993 and arrears of salary were also paid to the third respondent shall not entitle him to claim payment of gratuity on the basis of arrears of salary since the date fixed for computation of the gratuity in the revised salary was 1st November, 1994. He has relied on the Full Bench judgment of the Kerala High Court in the case of R. Parasurama Iyer v. State Bank of Travancore reported in (2016) 2 KLJ 105 decided on 3rd March, 2016. He submitted that same scheme of the bank by which cut-off date for 3 payment of gratuity was fixed as 1st November, 1994 was upheld by the Full Bench of the Kerala High Court. It is further submitted that the said judgment was noticed and approved by this Court in the case of Central Bank of India v. M. Sethumadhavan reported in (2017) 13 SCC 298.
Learned counsel for the respondents submitted that the arrears of salary having been paid to the third respondent w.e.f. 1st July, 1993, he was clearly entitled to reckon the revised salary for computation of gratuity and no error has been committed by the Controlling Authority in directing payment of arrears of the gratuity to the third respondent that too meagre amount of Rs.85,400/-. No interim order was passed in this appeal, although leave was granted on 7th January, 2010. We are sure that the third respondent must have received the different in the amount of gratuity, which was already allowed to him.
The High Court in the impugned judgment has taken the view that in the settlement entered into in respect of revision of salary a subsequent cut-off date was 1 st November, 1994 for the purpose of gratuity, which is unsustainable. In paragraph 21 of the impugned judgment, the Division Bench had made the following observations: 4
"In these circumstances, the contention of the learned counsel for the appellant that in the Settlement entered into in respect of revision of salary, a subsequent cut-off date viz., 1.11.1994 was fixed for the purpose of gratuity claim and hence, the third respondent is not entitled to claim more than what he was granted as gratuity cannot be countenanced especially when the third respondent was an employee within the meaning of Payment of Gratuity Act, 1972, even after its amendment dated 25.4.1994. Further, the agreement entered into cannot take away the rights of parties, particularly when a better benefit is given to the employees. In such view of the matter, it is not possible to accept the contention of the learned counsel for the appellant and we find no reason to interfere with the order of the learned Judge."
The Division Bench has taken the view that fixation of cut-off date for payment of gratuity is unsustainable. In the present case the cut-off date was 1st November, 1994 which was the date fixed for computation of payment of gratuity in the revised pay scale on the basis of settlement relied upon by the respondents as well as the bank.
The cut-off date for revision of the wages is a different concept than payment of gratuity on a particular date. As per the provisions of the Payment of Gratuity Act, 1972 which were existing on the date of retirement of the third respondent, the maximum gratuity 5 payment was Rs.1,00,000/- (Rupees one lac). The Full Bench of the Kerala High Court had considered all aspects of the matter including the divergent views taken by different High Courts and has upheld the cut-off date. The judgment of this court in the case of Central Bank (supra) has also referred to the judgment of the Kerala High Court with approval in paragraph 5 of the judgment. Although learned counsel for the appellant is correct in his submission that no further consideration has been made in the said judgment, the judgment of this Court in the case of Central Bank (supra) has clearly upheld fixation of cut-off date for different purposes, which is clear from paragraph 8 of the judgment. Paragraph Nos. 5 and 8 of the judgment in Central Bank of India (supra) are as follows:-
“5. We find that during the pendency of the matters before this Court, a Full Bench of the High Court of Kerala, having regard to the divergent views taken by Division Benches of the said Court, has considered this issue, leading to the judgment dated 3-3-2016 in R. Parasurama Iyer v. State Bank of Travancore, (2016) 2 KLJ 105 and it has been held that fixation of cut-off date for extending the benefit of gratuity from a different date as compared to revision of pay- scale can neither be said to be arbitrary, discriminatory or violative of Articles 14 and 16 of the Constitution of India. The Full Bench has also placed reliance on the decisions of this Court in State Govt. Pensioners’ Assn. v. State 6 of A.P., (1986) 3 SCC 501, State of A.P. v. A.P. Pensioners’ Assn., (2005) 13 SCC 161 and State of Bihar v. Bihar Pensioners Samaj, (2006) 5 SCC 65.
8. Fixing of the cut-off date has been a well-
accepted principle and we do not find that the same needs to be supported by any judgment since it has been the consistent view taken by this Court. In State of Punjab v. Amar Nath Goyal, (2005) 6 SCC 754, which was subsequently followed in State of A.P. v. N. Subbarayudu, (2008) 14 SCC 702, this Court has referred to all the judgments in that regard. In the peculiar facts of this case, having regard to the background of the regularisation making process, we are of the view that the cut-off date fixed by the appellants in the regularisation was not arbitrary, unjust or unfair.” One more judgment of this court, which is relevant for the issue, which has arisen in the present appeal is judgment of this Court in State of Bihar and Others Vs. Bihar Pensioners Samaj, (2006) 5 SCC 65. The State of Bihar has taken a Resolution on 19.04.1990 for revising certain benefits of its employees, including the revision regulating family pension, death-cum-retirement gratuity. Paragraph No.2 of the judgment refers to the Resolution of the Government, which is to the following effect:-
“2. A notification, Resolution No. PCI-Id/S7- 1853-F dated 19-4-1990, was issued by the State Government relating to the provisions regulating pension and death-cum-retirement gratuity pursuant to the recommendations of a special committee known as “Fitment-cum-Pay Revision Committee”. The notification declared that after considering the recommendations of the aforesaid 7 Committee the State Government, after due deliberations, had decided to revise the provisions regulating pension, family pension and death-cum-retirement gratuity of the State Government employees “to the effect and extent indicated in the subsequent paragraphs”. That certain benefits were made available under the said notification is common ground. However, the effective date of the notification was fixed as 1-1-1986, although the notification declared that, the financial benefits of revision of pension would be admissible only with effect from 1-3-1989 and no arrears would be paid for the period 1-1-1986 to 28-2-1989. Para 1 of the said notification is relevant and reads as under:
“1. (i) Date of effect.—The revised provisions as per these orders shall apply to government servants, who retire/die in harness on or after 1-1-1986. The revision of pension with effect from 1-1-1986 shall be merely notional as the financial benefit of revision of pension will be admissible only with effect from 1-3-1989, to it, no arrears accruing from revision of pension during the period from 1-1-1986 to 28-2-1989 shall be paid to the pensioners.
(ii) Where pension has been provisionally sanctioned in cases occurring on or after 1-1-1986, the same shall be revised in terms of these orders. In cases where pension has been finally sanctioned under the pre-revised orders, the same shall be revised in terms of these orders, provided such revision is to the advantage of the pensioner (sic).” The Association of Employees filed a Writ Petition in the Patna High Court, which writ petition was allowed on 21.08.1996. Notifications in questions were quashed and 8 Government was directed to reconsider the matter in accordance with law. The judgment was although challenged in this Court but the special leave petition was summarily dismissed by this Court on 20.01.1997. The Governor of Bihar issued an Ordinance namely “the Bihar State Government Employees Revision of Pension, Family Pension and Death-cum-Retirement Gratuity (Validation and Enforcement) Ordinance, 2000”, which was subsequently replaced by the Bihar Act 3 of 2001. The Act validated the revision of pension and gratuity in accordance with earlier two resolutions dated 19.04.1990. A writ petition was filed in the High Court challenging the Ordinance, which was struck down by the High Court. The challenge to the Ordinance and the Act on the ground of violation of Article 14, i.e. cut-off date for payment of the pensionary benefits w.e.f. 01.03.1989 was repelled by this Court. In Paragraph No. 17, this Court held:-
17. ……………The only ground on which Article 14 has been put forward by the learned counsel for the respondent is that the fixation of the cut-off date for payment of the revised benefits under the two notifications concerned was arbitrary and it resulted in denying arrears of payments to certain sections of the employees. This argument is no longer res integra. It has been held in a catena of judgments that fixing of a cut-off date for granting of benefits is well within the powers of the Government as long as the reasons 9 therefor are not arbitrary and are based on some rational consideration.” Thus, this Court held that the fixation of date for payment of financial benefits, w.e.f. 01.03.1989, does not suffer from any infirmity, even though the effective date of the notification was fixed as 01.01.1986. The above ratio fully supports the view, which we have taken above.
In view of the aforesaid, we are of the view that the Division Bench judgment of the High Court is unsustainable. In the facts of the present case, looking to the quantum of amount which is only Rs.85,400/- which was directed to be paid to the respondent No.3 more than a decade ago, the appellant-Bank shall not take any step for recovery of the said amount, in case the amount has already been paid to respondent No.3. Subject to the above, the appeal is allowed. No costs.
......................J. ( ASHOK BHUSHAN ) ......................J. ( INDU MALHOTRA ) New Delhi, November 29, 2018.
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ITEM NO.111 COURT NO.8 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 197/2010
INDIAN OVERSEAS BANK Appellant(s)
VERSUS
THE REGIONAL LABOUR COMMISSIONER (C) AND APPELLATE AUTHORITY AND ORS. Respondent(s) WITH C.A. No. 10890/2018 (FOR ADMISSION and I.R. and IA No.148845/2018-CONDONATION OF DELAY IN FILING) Date : 29-11-2018 These appeals were called on for hearing today. CORAM :
HON'BLE MR. JUSTICE ASHOK BHUSHAN HON'BLE MS. JUSTICE INDU MALHOTRA For Appellant(s) Mr. Sanchar Anand,Adv.
Mr. Apoorv Singhal,Adv.
Mr. Naveen Pandey,Adv.
Mr. Devendra Singh, AOR Ms. Praveena Gautam, AOR For Respondent(s) Mr. S.Nandakumar,Adv.
Mr. V. N. Raghupathy, AOR Mr. M.S.Sarankumar,Adv.
Ms. Deepika Nandakumar,Adv.
Mr. Vishnu Prasath,Adv.
UPON hearing the counsel the Court made the following O R D E R C.A. No. 10890/2018 Leave was granted in this matter on 29th October, 2018.
Let fresh steps be taken to serve the respondents within six weeks.
Dasti service is permitted.11
List the matter after six weeks.C.A. No. 197/2010
The appeal is allowed in terms of the signed order. Pending application, if any, shall also stand disposed of.
(ANITA MALHOTRA) (CHANDER BALA) COURT MASTER COURT MASTER
(Signed order in CA No.197/2010 is placed on the file.) 12