Gujarat High Court
Patdi Taluka Panchayat vs Shardaben Velabhai Miyavara Since ... on 17 July, 2025
NEUTRAL CITATION
C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3498 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No
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PATDI TALUKA PANCHAYAT
Versus
SHARDABEN VELABHAI MIYAVARA SINCE DECD. THROUGH HER L H &
ORS.
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Appearance:
MR HS MUNSHAW(495) for the Petitioner(s) No. 1
MR KRUNAL D PANDYA(3283) for the Respondent(s) No. 1.1,1.2,1.3
NOTICE SERVED for the Respondent(s) No. 2,3
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 17/07/2025
ORAL JUDGMENT
1. The present petition is filed under Articles 226 and 227 of the Constitution of India, challenging the order passed by the learned Controlling Authority dated 29.07.2021 as well as the order passed by the learned Appellate Authority dated 12.12.2022, whereby the present petitioner was directed to pay the amount of Rs.1,52,978/- with 10% interest from 07.10.2020 till actual realization towards the gratuity to the heirs of the deceased employee.
2. It is the case of the present petitioner that the respondent Page 1 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined was working with the petitioner - Panchayat since 01.10.1981 and who died on 07.09.2020. She had completed 39 years of service and as per the contention of the petitioner, she worked for 4 hours per day and therefore, she was paid wages at the rate of Rs.261.50/- paisa per day as per the provision of the Minimum Wages Act. It is the case of the present petitioner that the respondent No.1 was working as a part-timer and the order dated 14.02.1983 suggests that her working hours were enhanced as well as remuneration was also enhanced according to the working hours. As per the case of the present petitioner that the respondent was paid a monthly fixed remuneration of Rs.14,800/- with effect from 01.01.2019, though she was not entitled as per the Government Resolution dated 16.07.2019. As the excess amount was paid to the deceased employee, therefore, the gratuity which was claimed by the heirs of the respondent was not released. The case was filed before the learned Controlling Authority, being Gratuity Application No.49 of 2021, claiming the amount of gratuity of Rs.2,88,598/-, which was allowed by the learned Controlling Authority and affirmed by the learned Appellate Authority in the appeal. Challenging the order passed by both the Authorities, the present petition is Page 2 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined filed.
3. Heard learned advocate Mr. Munshaw for the petitioner and learned advocate Mr. Pandya for the respondent Nos.1.1 to 1.3.
4. The learned advocate Mr. Munshaw submits that the G.R. dated 16.07.2019 is applicable to government employees;
however, the deceased workman was serving with the Taluka Panchayat, therefore, she would not be entitled to the payment, which is made by mistake. The learned advocate Mr. Munshaw submitted that as the excess amount was paid, therefore, the office-bearer of the Panchayat has rightly not released the amount claimed by the present heirs of the respondent under the Payment of Gratuity Act. The learned advocate Mr. Munshaw submitted that without considering the above aspect, the impugned orders are passed; therefore, the same are required to be set aside and the petition is required to be allowed.
5. Per contra, the learned advocate Mr. Pandya submits that during the lifetime of the deceased employee, no proceedings were initiated for recovery of the excess amount. The learned advocate Mr. Pandya submits that there was no fault on the part Page 3 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined of the deceased employee, nor on her misrepresentation was the amount of wages at the rate of Rs.14,800/- paid. The learned advocate Mr. Pandya submits that as the respondent has served for 39 years with the petitioner - Panchayat, therefore, the learned Controlling Authority as well as the learned Appellate Authority are justified in directing the present petitioner to pay the amount towards the gratuity.
5.1 With the above submissions, the learned advocate Mr. Pandya has prayed to dismiss the present petition.
6. Having heard the arguments advanced by the learned advocates for the respective parties and on referring to the reasons, it emerges that the deceased employee had served with the Panchayat from 01.10.1981 to 07.09.2020. During her employment, she died on 07.09.2020, at that time she had completed 39 years of service. It emerges that the heirs had filed an application before the learned Controlling Authority claiming the gratuity under the Payment of Gratuity Act and at that point of time, the defence was raised by the respondent that an excess amount towards the monthly remuneration of Rs.14,800/- was paid with effect from 01.01.2019; therefore, the same is required Page 4 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined to be adjusted against the gratuity amount. It is an undisputed fact that during the lifetime of the deceased employee, no notice nor any proceedings were initiated to recover the excess amount.
However, only on filing an application under the Payment of Gratuity Act, such contention was raised for the first time before the authority.
6.1 This Court has referred to the decision rendered by the Hon'ble Apex Court in the case of Jogeswar Sahoo and Ors V/s.
District Judge, Cuttack And Ors. reported in 2025 (4) JT 282, wherein the Hon'ble Apex Court has held para Nos.9, 12 and 13 as under;
"9. This Court has consistently taken the view that if the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee or if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous, such excess payments of emoluments or allowances are not recoverable. It is held that such relief against the recovery is not because of any right of the employee but in equity, exercising judicial discretion to provide relief to the employee from the hardship that will be caused if the recovery is ordered.
12. In Syed Abdul Qadir v. State of Bihar3 excess payment was sought to be recovered which was made to the appellants-teachers on account of mistake and wrong Page 5 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined interpretation of prevailing Bihar Nationalised Secondary School (Service Conditions) Rules, 1983. The appellants therein contended that even if it were to be held that the appellants were not entitled to the benefit of additional increment on promotion, the excess amount should not be recovered from them, it having been paid without any misrepresentation or fraud on their part. The Court held that the appellants cannot be held responsible in such a situation and recovery of the excess payment should not be ordered, especially when the employee has subsequently retired. The court observed that in general parlance, recovery is prohibited by courts where there exists no misrepresentation or fraud on the part of the employee and when the excess payment has been made by applying a wrong interpretation/understanding of a Rule or Order. It was held thus:
"59. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter- affidavit, admitted that it was a bona fide mistake on their part. The excess payment made was the result of wrong interpretation of the Rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellant teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should Page 6 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined be made."
13. In State of Punjab v. Rafiq Masih (White Washer)4 wherein this court examined the validity of an order passed by the State to recover the monetary gains wrongly extended to the beneficiary employees in excess of their entitlements without any fault or misrepresentation at the behest of the recipient. This Court considered situations of hardship caused to an employee, if recovery is directed to reimburse the employer and disallowed the same, exempting the beneficiary employees from such recovery. It was held thus:
"8. As between two parties, if a determination is rendered in favour of the party, which is the weaker of the two, without any serious detriment to the other (which is truly a welfare State), the issue resolved would be in consonance with the concept of justice, which is assured to the citizens of India, even in the Preamble of the Constitution of India. The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the employee concerned. If the effect of the recovery from the employee concerned would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover.
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18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i) Recovery from the employees belonging to Class III and Page 7 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined Class IV service (or Group C and Group D service).
(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.
(iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
(v) In any other case, where the court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover."
6.2 Undisputedly, the payment was made to the deceased employee not on account of any fraud or misrepresentation. As held by the Hon'ble Apex Court in the case of State of Punjab vs. Rafiq Masih (White Washer, the respondent would fall under the category of (i) and (ii) and therefore, the learned Authorities have rightly directed the present petitioner to pay the amount towards the gratuity.
6.3 This Court, in the case of Talaja Taluka SahakariKharid Vechan Sangh Through Manager Kanager Jagatsinh Ramsinh Sarvaiya V/s. Appellate Authority, render in SCA 4447/2024 wherein it is held that employees who were engaged as part-
Page 8 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined timers are also entitled to gratuity under the Payment of Gratuity Act, by observing in para Nos.7, 7.1 and 8 as under;
"7. At this stage the provisions of the gratuity act, more particularly section 4, section 2(r) and section 2(q) of the Payment of Gratuity Act, 1972 are required to be referred to which is reproduced hereinbelow:-
Section 4 (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned: (3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand] rupees. (4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(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. (6) Notwithstanding anything contained in sub-section (1),-
(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.
(b) the gratuity payable to an employee may be wholly Page 9 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined or partially forfeited] -
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. (7) [*] Section 2(q
(q) "retirement" means termination of the service of an employee otherwise than on superannuation;
Section 2(r [8] [(r) "superannuation", in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service at the age on the attainment of which the employee shall vacate the employment;] 7.1. Section 2(q) provides that entitlement to gratuity for an employee would arise only on termination of service and that amount has to be paid under section 7(3)(a) of the Payment of Gratuity Act, 1972 within a period of 30 days from the date of cessation of his employment. At this stage, reference of the judgment rendered by the Madras High Court in the case of Jeevanlal (1929) Limited And Ors. vs Controlling Authority is required to be referred to. Though in the said case, issue was with regard to the applicability of the Act, however, it was held that even after attaining the age of 58 years, which is the age of superannuation, when the employment was continued up to 01.09.1972, employee would be entitled for gratuity under the Payment of Gratuity Act, 1972, the relevant observation is reproduced herein- below:-
21.We will now take up the next batch of cases, viz., Writ Petition Nos. 338 to 340 and 492/77, 1377 to 1379/78 and 1540 to 1540 to 1542/78. These petitions have been filed by the employer, viz., Messrs. Jeevanlal Limited challenging the correctness of the orders passed by the Page 10 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined controlling authority and the appellate authority. In these cases, the facts are slightly different. The employees concerned in these cases had reached the age of superannuation which was 58 years well before the Act came into force. They were, however, re-employed on an yearly basis and eventually, their employment came to an end on 31-12- 1972 or 31-12-1973 as the case may be. Having regarded to this factor, the employees claimed that they were entitled to payment of gratuity in accordance with the terms of the Act. The Management, however, contended that their employment had come to a termination on their reaching the age of superannuation long before the Act came into force, and as such, they will be entitled to get gratuity only in accordance with the terms of the scheme or award which was in force earlier. As illustrative of the facts, we may set out the case of the worker by name Adisesha Pillai. He reached the age of superannuation of 58 years in 1968. The management informed him that this services in the company ceased on 31-12-1968, but, however, having regarded to his physical fitness and capacity, he was being given re-employment for a period of twelve months operative from 1st January, 1969 to 31st December 1969. In the same way for the subsequent years also, viz., 1970, 1971 and 1972 he was given re-employment and he stopped working in the company on and from 1-9-1972. Since the Act came into force on 16-1-1972, the employee claimed gratuity payments in accordance with the terms of the Act. On the other hand, the management said that gratuity would be paid him only as per the scheme or award originally governing the parties, which meant that only the basic pay, and not dearness allowance, would be taken into consideration for computing gratuity.
22.Mr. Gopalan, learned counsel for the petitioner in these cases, argued that since the employees had reached superannuation, their services must be deemed to have become terminated at the end of that year, in Page 11 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined which they reached the age of superannuation, and since that event had taken place before the Act came into force, the employees were not entitled to rely upon the provisions of the Act for payment of gratuity. In support of the contention, reliance was placed on State of W.B. v. Purenda Sen, (1977) Lab. I.C., 1978.
23.23. In our opinion, the contentions of the petitioner are clearly untenable. Though the employees had reached the age of superannuation before the Act came into force, they were given re-employment in such a manner that were there was no break in their services.
Thus purely from a factual point of view the employees continued to serve the petitioner-company uninterruptedly. Secondly; it is common ground that on the employees reaching the age of superannuation and ceasing to be regular employees of the company, the gratuity payable to them as per scheme or award governing the parties was not paid to them by the company. If there was a legal break in their service, then it follows that the gratuity payable to them upto the date of their retirement would have been calculated and paid to them. Such a course had not been followed by the petitioner. Thirdly, it is seen that in the order of re- employment there is a clause, viz., clause (5) which provides for payment of gratuity for the period of service during re-employment also. The clause reads as follows :
"Without prejudice to any of these terms and conditions and without creating any admission or estopped by the Management against the binding character of these terms and conditions, you shall be entitled to contribute to the Company's Provident Fund Scheme and shall be also entitled to gratuity, if any, in terms of the Award (Settlement) Scheme governing you".
No doubt, the words used in the clause are, "Gratuity, if any, in terms of the Award "Settlement Scheme". But, on account of the Act coming into force, the provisions of the Act would override the contract between the parties unless the terms of the contract were more favourable Page 12 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined to the employees than what the Act has conferred on them. The order of re-employment indicates that for the period of re-employment also the worker would be entitled to gratuity benefits. As the actual stoppage of work has taken place after the Act came into force, the employees were justified in asking for payment of gratuity in accordance with the terms of the Act. State of W.B. v. Purnendu Sen, (1977) Lab. I.C., 1978 , cited by the petitioner's counsel decided ones not advance the petitioner's case in any manner. The decision in that case was rendered on the basis of the construction placed on a Government Order issued by the Government of West Bengal. The decision does not lay down any general principle of law. The concerned authorities were, therefore, right in taking the view that employees should get gratuity as per the terms of the Act.
8. This Court is of the view that as it is provided under section 4 of the Payment of Gratuity Act, 1972 that gratuity payable to the employee on termination of his employment and sub clause (b) provides that on his retirement and resignation, reading conjointly with the definition of section 2(q) of the Payment of Gratuity Act, 1972, in which retirement, means the termination of the service of an employee otherwise then on superannuation and the actual stoppage of work or termination was made admittedly in the instant case in the year 2021, therefore, employees would be entitled for the gratuity till the year 2021 as held by the learned Controlling Authority. This Court has also referred the list of the Management Committee along with the list of employees which are produced from the year 2012 to 2021 wherein, the name of the present respondent was figured as a Godown Keeper/Peon. The list of the Management Committee dated 31.03.2022 further refers that the respondent herein has continued up to 15.12.2021. As nothing is mentioned with regard to the part time employees in the said list, this Court is of the view that petitioner was continued till 15.12.2021 on the same post in which he was working before 2013. With regard to the non clearance of Page 13 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025 NEUTRAL CITATION C/SCA/3498/2023 JUDGMENT DATED: 17/07/2025 undefined the advance salary of Rs.27,400/- and Rs.9,200/- is concerned, there is no separate order passed by the petitioner-Society forfeiting the amount of gratuity to recover the advance which was taken by the present respondent. In addition to that, the respondent has contended that all the dues were cleared and for that, receipts being No.1109 and 1177 were issued which was not rebutted by the present petitioner by adducing any evidence. In that background also, the petitioner is entitled for the gratuity up to the period of 2021."
6.4 Considering the overall facts and the decisions referred to hereinabove, in the considered opinion of this Court, no error has been committed by the learned Authorities in directing the present petitioner to pay the amount of gratuity. Hence, the present petition deserves to be dismissed.
7. Resultantly, the present petition is dismissed. Record and Proceedings, if any, be sent back to the concerned court below.
8. After the appeal period is over, the learned Controlling Authority is directed to disburse the amount deposited by the petitioner in favour of the respondent upon due verification.
(M. K. THAKKER,J) Vikramsinh Amarsinh Page 14 of 14 Uploaded by Vikramsinh Amarsinh(HCW0055) on Mon Jul 21 2025 Downloaded on : Mon Jul 21 21:39:49 IST 2025