Gujarat High Court
Dabhoi Nagarpalika And Anr. vs S.J. Khedia And Anr. on 22 March, 1996
Equivalent citations: (1996)2GLR696
JUDGMENT M.R. Calla, J.
1. Heard learned Counsel.
The respondent No. 1 was in service of Dabhoi Nagarpalika. While he was working as Chief Officer of Dabhoi Nagarpalika he retired from the service on 30.9.1985 on attaining the age of superannuation. He served with the Municipality for about 26 years 6 months and 29 days. After the retirement as aforesaid the extension was granted to him and thereafter when he finally retired with the extension period being over he was paid retirement benefits like gratuity, pension etc. An amount of Rs. 37,167/- was paid to him as gratuity by 30-4-1986 in two instalments. It is the say of the respondent No. 1 that keeping in the spirit with the award applicable to the employees of the Municipality including the Chief Officer retrial benefits including gratuity were being paid to all retired employees and as far as back in 1965, the question of payment of gratuity had been decided by the arbitration. In these arbitration proceedings the Municipality itself had entered into the settlement and it was decided that all the employees shall be paid gratuity as mentioned in the aforesaid terms with effect from 1-1-1965. The respondent No. 1 has thus come with the case that even prior to coming into force of the Gratuity Act, it was the practice of the Municipality to pay gratuity to all the retired employees including the Chief Officer. By way of an illustration, the respondent No. 1 has referred to the case of Shri Natwarlal C. Shah who was also Chief Officer and was paid amount of gratuity as per the award existing at that time. The respondent No. 1 has also come with the case that Dabhoi Municipality had paid due amount of gratuity to him with full understanding and awareness with regard to the matters governing the gratuity and when April, 1986 it was very well known to the Municipality that he had retired while holding the post of Chief Officer.
2. In the year 1990 the incumbent held the post of Chief Officer of Dabhoi Municipality. It passed the order against respondent No. 1 based on the audit objection that he should refund the amount of Rs. 37,177/- which had been paid to him against the gratuity. It is the case of the respondent No. 1 that this order had been passed in the year 1990 by the Chief Officer of Dabhoi Municipality without any prior notice to him and the same was void ab initio. The respondent No. 1 filed reply dated 21-4-1994 that the amount could not be recovered from him and the order dated 27-4-1994 passed to this effect by the Dabhoi Municipality was wrong. The amount of gratuity which had been duly paid to the respondent No. 1 was sought to be recovered from him on the basis of audit objection that he was neither governed by the provisions of the Industrial Disputes Act nor by the provisions of the Payment of Gratuity Act and since the payment had been illegally made a sum of Rs. 500/- may be deducted from the amount of pension payable to him every month and accordingly a sum every month and accordingly a sum of Rs. 500/- p.m. was deducted from his pension and respondent No. 1 stated that sum of Rs. 5,271/- had already been deducted from his pension and at this juncture he was compelled to file the petition before this Court through Special Civil Application No. 2195 of 1994. This Special Civil Application No. 2195 of 1994 was decided by this Court on 12-7-1995 with a direction to the Competent Authority to direction to the Competent Authority to decide his representation as expeditiously as possible and with a further direction that until such representation is decided there will be no further deduction from the pensionary benefits. The Controlling Authority under the payment of Gratuity Act decided the representation after considering the case of both the parties and it came to the conclusion that in terms of the award the Municipal servants were covered and the Municipal servant includes the Chief Officer and accordingly the gratuity paid to respondent No. 1 as Chief Officer in terms of the award was proper. The Competent Authority under the Payment of Gratuity Act also found that other Municipalities, e.g., Nadiad Municipality had also paid the amount of gratuity on the basis of the award and the certificate had also been given by the Nadiad Municipality to the effect that the effect that the Chief Officer of the Municipality of Nadiad was paid gratuity under the award passed under the Industrial disputes Act and Certificate dated 21-2-1995 was also produced before the Competent Authority. It is, therefore, argued that the payment of gratuity made to the respondent No. 1 was in order. It has also been submitted on behalf of respondent No. 1 that he was entitled to the payment of gratuity even under the Bombay Civil Service Rules of Dabhoi Municipality framed under Section 271 of the Gujarat Municipality Act. Bombay Civil Service Rules had been adopted and it has been clearly provided in Clause 10 of Chapter 12 that in regard to the point not specifically provided for in the Municipal Service Rules, the Bombay Civil Service Rules shall be followed and the Municipality had adopted the Bombay Civil Service Rules. On this basis, it has been submitted that the order dated 27-4-1994 was an illegal order and no recovery could be effected from the pension in respect of the amount which had been paid as gratuity.
3. After this Court's order dated 12-7-1995 passed in the Special Civil Application No. 2195 of 1994 which had been earlier filed by respondent No. 1, the Controlling Authority had passed the order on 17-10-1995 that there was no question of effecting recovery from the pension and that the amount of gratuity which had been paid to respondent No. 1 was not open to be recovered back by the Dabhoi Municipality and further that deduction which had already been made and recovered from the pension of respondent No. 1 was unlawful.
4. Aggrieved from this order passed by the Controlling Authority on 17-10-1995 the Dabhoi Nagarpalika had preferred present petition and it is argued by Mr. M. I. Patel for Dabhoi Nagarpalika that the respondent No. 1 was not entitled to gratuity under the award or under the Gratuity Act and even if he is held to be entitled to the payment of gratuity in accordance with the relevant provisions applicable to the Municipalities on the basis of the adoption of the Bombay Civil Service Rules, the Controlling Authority's order was unlawful because the respondent No. 1 himself is an employer within the meaning of the Gratuity Act and he was also covered by definition of the employer under the Industrial Disputes Act.
5. So far as the entitlement to receive the gratuity is concerned it may straightaway be observed that the audit objection which was taken in this regard is wholly misplaced. The holder of particular post or position in any establishment may be covered by definition of employer so far as the employees subordinate to the holders of such post or position are concerned nevertheless the holder of such post is an employee qua the Municipality. The Chief Officer of the Municipality is certainly an employee of the Municipality even if he is an employer for the persons holding post in respect of which he is appointing authority. Thus, the argument that the respondent No. 1 was himself an employer and therefore, not entitled to the gratuity is not only mis-conceived but appears to be ill-conceived argument, just to defeat the honest and just claim with regard to the gratuity. Practice of paying the gratuity to all the employees of the Municipality. The allegation of respondent No. 1 that in past the gratuity has been paid to the holders of the same post as was held by him and by way of an illustration the case of the Chief Officer, viz., Natwarlal C. Shah has been cited and the case of the respondent No. 1 that the practice of paying this gratuity on retirement was going on since 1965 even prior to the coming into force of the Gratuity Act. It appears that the Municipality has been working under some mistaken belief and under mis-conception of legal position on the basis of the audit objection that the holders of the post like Chief Officer were not entitled to gratuity. Whether the entitlement flows from the provisions of the Gratuity Act or award or not entitlement of the gratuity is clearly discernible from the fact that the rules with regard to the payment of gratuity made applicable on the basis of Bombay Civil Service Rules. The employees of the Municipality as has been given in the document at Annexure A/1 issued by the Dabhoi Nagarpalika itself way back in the year 1980, i.e., at a point of time when the parties were not in dispute and in this document it has been clearly agreed by the Municipality before the Industrial Tribunal that all the employees of the Municipality were entitled to provident fund, pension and gratuity. Mr. Patel appearing on behalf of the petitioners has also not disputed the applicability of the relevant rules in the matters of gratuity by way of adoption of Bombay Civil Service Rules.
6. In this view of the matter, I do not find any infirmity in the order passed by the Controlling authority holding that no amount already paid by way of gratuity to the respondent No. 1 way back in the year 1986 was not open to be recovered from the amount of pension payable to respondent No. 1 and the finding that the amount of Rs. 500/- which has been deducted from the pension amount of the respondent No. 1 had also been wrongly deducted, does not call for any interference and accordingly the respondent No. 1 is entitled to the return of any amount which has been deducted from his pension against the recovery from the gratuity amount already paid to him way back in the year 1986. There is no merit in this special civil Application the same is hereby dismissed. Notice is discharged. No order as to costs.