Madras High Court
D.Chandrasekaran vs The Registrar Of Co.Operative ... on 28 August, 2014
Author: S.Vaidyanathan
Bench: S.Vaidyanathan
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :28.08.2014
CORAM
THE HONOURABLE MR.JUSTICE S.VAIDYANATHAN
W.P.No.8397 of 2013
and M.P.No.1 of 2013
D.Chandrasekaran ..Petitioner
Vs
1. The Registrar of Co.operative Societies (Housing)
Chennai 600 035.
2. The Special Officer,
Thiruvannamalai Co.operative
House Building Society,
Thiruvannamalai 606 602 ..Respondents
Prayer:- Writ Petition filed under Article 226 of the Constitution of India for the issuance of a writ of Certiorarified mandamus to call for the records on the file of the respondents relating to the impugned order of the 1st respondent bearing Na.Ka.1395/2011 sa.pa.1 dated 7.2.2013 and quash the same and direct the 2nd respondent to pay the balance gratuity amount of Rs.8,48,865/- and the balance of surrender of earned leave wages of Rs.44,458/- with interest at 12% on those amounts from 1.2.2011 to till date of payment.
For Petitioner : Mr.R.Arumugam
For Respondents : Mr.L.P.Shanmugasundaram, SGP (R1)
Mr.R.Bala Ramesh (R2)
O R D E R
The petitioner has come forward with this writ petition challenging the order of the 1st respondent dated 7.2.2013 and to direct the 2nd respondent to pay the balance gratuity amount of Rs.8,48,865/- and the balance of surrender of earned leave wages of Rs.44,458/- with interest at 12% p.a. on those amounts from 1.2.2011 to till date of payment.
2. The case of the petitioner is that he joined the services of the 2nd respondent Society on 01.05.1975; after rendering service for 35 years, he attained the age of superannuation on 31.01.2011; the Deputy Registrar, by his letter dated 27.01.2011, permitted the 2nd respondent to settle all the retiral benefits of the petitioner on his retirement on 31.01.2011. The 2nd respondent Society is having a registered Bylaw relating the service conditions of the employees. Bylaw 27 deals with gratuity. Based on the said Bylaw, the 2nd respondent framed gratuity rules and the same weres approved by the Deputy Registrar on 20.01.1994. According to the petitioner, as per Rule 9 of the Gratuity Rule, he is entitled to gratuity based on the average monthly basic salary drawn during the last three years of his service. It is the further case of the petitioner that even though the Registrar issued a circular dated 4.9.97, the 2nd respondent did not modify the gratuity which were approved on 20.01.1994. Hence, the existing rules are in force. The petitioner made several representations to the 2nd respondent to correct the gratuity amount and other retirement benefits. However the 2nd respondent has paid Rs.3,50,000/- as gratuity, even though as per Bylaw 27, the gratuity comes to Rs.11,98,855/-. Therefore, the petitioner filed a revision petition dated 23.02.2011 before the 1st respondent under Section 153 of the Tamil Nadu Co.operative Societies Act, as against the order of the 2nd respondent dated 31.01.2011 in so far as the retirement benefit calculations made in it and to direct the 2nd respondent to pay the balance gratuity amount, Earned leave salary, EPF and 115% D.A. Since the said revision petition was not disposed of, the petitioner filed a writ petition before this Court in W.P.No.28349 of 2012 for a direction to the 1st respondent to dispose of the said revision, wherein, this Court, by order dated 17.10.2012 issued direction to the 1st respondent to pass orders on the revision petition within a period of four weeks. Since the 1st respondent failed to comply with the order of this Court, the petitioner issued a contempt notice and thereafter, the impugned order has been passed. Aggrieved against the said order, this writ petition is filed.
3. The learned counsel for the petitioner submitted that even though the Gratuity Act has been amended increasing the ceiling limit from Rs.3.5 lakhs to Rs.10 lakhs with effect from 24.05.2010 as per Payment of Gratuity (Amendment) Act, 2010 (15 of 2010), the conclusion arrived at by the 1st respondent that the petitioner is entitled only to a sum of Rs.3.5 lakhs towards gratuity is wrong. According to the learned counsel for the petitioner, the reason given for non-sanctioning of increased gratuity amount is that the petitioner is governed by Rule 9(d) of the Gratuity Rules. It is the contention of the learned counsel for the petitioner that only Rule 9(c) of the Gratuity Rules is applicable and not Rule 9(d), since Rule 9(c) is applicable to persons who reaches 58 years or death, and Rule 9(d) deals is applicable to persons who resigns from service. As far as the petitioner is concerned, he has reached the age of superannuation and retired from service and hence Rule 9(c) is only applicable. Further, according to the learned counsel for the petitioner, since the petitioner is having 207 days of earned leave on the date of his retirement, at his credit, he is entitled to encash 207 days wages instead of 180 days, thereby, he is entitled to a sum of Rs.44,458/- towards the balance of surrender of earned leave wages.
4. The 2nd respondent has filed a counter affidavit. Relying on the said counter affidavit, it is the contention of the learned Additional Government Pleader that the case of the petitioner will not come under Rule 9 (c) of the Gratuity Rules, as it will be applicable only to persons who have been terminated from service and since the petitioner has retired from service on reaching the age of superannuation, he is governed by Rule 9(d). According to him, the petitioner is entitled to a sum of Rs.3.5 lakhs only towards gratuity and the said amount has been paid and therefore, he cannot seek for more amount than what was granted as per the bylaws. It is further contended that the Payment of Gratuity Act, 1972 is not applicable to the Society as there were only 4 employees and the said Act is applicable only if there are more than 10 employees. As far as the contention of the learned counsel for the petitioner with regard to earned leave wages is concerned, it is the contention of the learned Additional Government Pleader that the petitioner is entitled to only earned leave wages upto 180 days as per the special bylaw 11(2) and he is not entitled to claim earned leave wages for 207 days and hence the earned leave wages for 37 days have been deprived. Based on the above submissions, the learned Additional Government Pleader has sought for dismissal of the writ petition.
5. Heard the learned counsel on either side and perused the materials available on record, particularly, the relevant provisions.
6. The admitted facts are that the petitioner joined the services of the Society on 01.05.1975; rendered 35 years of service and he retired from service on 31.01.2011. It is also not in dispute that Payment of Gratuity Act 1972 is not applicable to the facts of this case. However, it is pertinent to extract below the relevant provision of Section 4(5) of the Payment of Gratuity Act, to give a finality to the issue on hand.
"4. Payment of gratuity:-
(1)..
...
(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer..."
It is not a case of resignation. This Court is not inclined to give a narrow interpretation to Rule 9(c) of the Rules, by holding that if the employees are terminated, they would be entitled to a maximum gratuity and the employees who have retired on attaining the age of superannuation, is not entitled to gratuity beyond Rs.3.5 lakhs.
7. That apart, in the decision reported in AIR 1981 Supreme Court 212 (Som Prakash Rekhi vs. Union of India and others), the Hon'ble Supreme Court has held that gratuity is non-gratuitous or bounty and the employee is entitled to gratuity as a matter of right.
8. For the sake of convenience, Rule 9 of the Gratuity Rule is extracted below:-
"9. Amount of Gratuity: The amount of gratuity admissible to an employee is as follows:-
a) When a member of the staff leave the service within 5 years from the date of his permanent appointment, he shall have no claim to the benefit of this fund.
b) On the termination of a member's service in the society from 5 to 10 years under circumstances stated in clause (a) (b) or (c) in para 3, the board of management shall pay to him or his widow or his children on amount calculated at half a month's pay for every year of service in the society.
c) On the termination of a member's service in the society after 10 years under circumstances stated in clause (a) (b) or (c) in para 3, the Board of Management shall pay to him or his widow or his children the amount equal to one month's pay for every years of service in the society.
d) In the case of resignation after 15 years service as provided in para 3(d) the amount of gratuity payable shall be an amount equal to one month's salary for every year of service provided that the amount so payable shall never exceed 15 months' pay under any circumstances.
Note: Pay for this means the average monthly basic salary drawn during the last three years of the employees' service".
A perusal of the above rule particularly under the "Note" would make it crystal clear that an employee is entitled to gratuity on the average monthly basic salary drawn during the last three years of the service and the maximum gratuity benefit will have to be extended to the employee who have attained the age of superannuation and retired from service.
9. That apart, Clause (d) of Rule 9, is almost analogous to Rule 23 of the Tamil Nadu Pension Rules,, 1978, which is extracted below:-
"23. Forfeiture of service on resignation: (1) Resignation from a service or post entails forfeiture of past service:
Provided that a resignation shall not entail forfeiture of past service if it has been submitted to take up with proper permission, another appointment, whether temporary or permanent, under the Government where service qualifies.
(2) Interruption in service in a case falling under the proviso to sub-rule (1) due to the two appointments being at different stations, not exceeding the joining time permissible under the rules of transfer, shall be covered by grant of leave of any kind due to the Government servant on the date of relief or by formal condonation to the extent to which the period is not covered by leave due to the Government servant".
A perusal of the above rule 23, it is evidently clear that if an employee resigns from service, the entire service will be forfeited except for certain conditions. As per Clause (d) of Rule 9, extracted supra, if an employee resigns after 15 years of service, the gratuity amount will never exceed 15 months' pay under any circumstances. Whether gratuity can be deprived to an employee who have rendered 15 years of service invoking clause (d) of Rule 9 or not, is not the subject matter before this Court, as the petitioner is governed only by clause (c) of Rule 9, which is extracted above. As far as the case on hand is concerned, since the petitioner has superannuated from service, he is entitled to gratuity amount as claimed by him. Hence, this Court is of the view that the petitioner is entitled to succeed as far as payment of gratuity is concerned.
10. With regard to the other issue viz., encashment of earned leave wages, as per bylaw 11(2), the petitioner is not entitled to encash the earned leave beyond 180 days. Hence, this Court is not inclined to grant that portion of the relief sought for with regard to payment of surrender of earned leave wages.
11. In fine, the writ petition is partly allowed by directing the respondents to release the balance amount of gratuity to the petitioner with 6% simple interest p.a. from the date when the gratuity amount became due till the date of payment. It is made clear that as far as relief sought for with regard to encashment of earned leave wages is concerned, the writ petition is dismissed. No costs. Connected miscellaneous petition is closed.
28.08.2014 rg Index:Yes/ To
1. The Registrar of Co.operative Societies (Housing) Chennai 600 035.
2. The Special Officer, Thiruvannamalai Co.operative House Building Society, Thiruvannamalai 606 602 S.VAIDYANATHAN, J rg W.P.No.8397 of 2013 28.08.2014