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Madhya Pradesh High Court

The Municipal Council Damoh vs Shri Madhav Prasad on 1 May, 2020

Author: Vishal Dhagat

Bench: Vishal Dhagat

                                                             1




                            HIGH COURT OF MADHYA PRADESH, PRINCIPAL SEAT AT
                                              JABALPUR

                       Miscellaneous Petition No.                      877 of 2018
                       Parties Name                              Municipal Council, Damoh
                                                                          Versus
                                                                 Madhav Prasad & another
                       Bench Constituted                 Hon'ble Shri Justice Vishal Dhagat
                       Whether approved for              Yes/No
                       reporting
                       Name of counsels for parties      For petitioner: Shri Anshuman Singh,
                                                         Advocate

                                                         For    private    respondent:        Shri
                                                         R.S.Thakur, Advocate.

                       Law laid down                     -
                       Significant paragraph             -
                       numbers

                                                        ORDER

1.5.2020 Petitioner i.e. Municipal Council of the Damoh has filed the present miscellaneous petition challenging the order passed by Controlling Authority under Payment of Gratuity Act, 1972 dated 20.9.2017.

2. Respondent has not availed the alternative remedy of filing an appeal before the Appellate Authority against the impugned order passed by the Controlling Authority. As bunch of petitions has been heard and decided together, therefore, this petition is also being disposed of on the same terms.

3. The respondent was working as Lower Division Clerk in Municipal Council, Damoh. He was appointed on 15.9.1971 and he was superannuated from service on 30.6.2008 after attaining age of 60 years. Municipal Council, Damoh granted an amount of Rs.1,74,488/- to Digitally signed by AMIT JAIN Date: 01/05/2020 10:16:43 2 the respondent. Later on, pay of the respondent was revised as per Revision of Pay Rules, 2009. After retirement, respondent was paid arrears of salary arrived at after refixation of pay. Respondent had filed an application before the Controlling Authority under Payment of Gratuity Act, 1972 claiming that he has been paid less amount of gratuity and he is entitled to get gratuity as per Payment of Gratuity Act, 1972. The Controlling Authority vide its order dated 20.9.2017 held that respondent is entitled to the remaining gratuity amount of Rs.75,689/-. Respondent was paid gratuity amount of Rs.1,74,488/- by the Municipal Council. Petitioner was ordered to be paid difference of this amount. The Controlling Authority also held that respondent is also entitled to get interest due to delayed payment. It was also held by the Controlling Authority that there was delay of nine years & two months and, therefore, 10% interest is also to be paid to the respondent. Total amount of interest comes to Rs.69,381/- and the total amount of gratuity to be paid to respondent is Rs.1,45,070/-. The Controlling Authority further held that Section 14 of Payment of Gratuity Act, 1972 will have overriding effect on other laws and rules, which are inconsistent with Payment of Gratuity Act, 1972.

4. Learned counsel for the Municipal Council before Controlling Authority had made arguments that employees of Municipal Council are being paid salary and gratuity as per Municipal Council Pension Rules 1980. Respondent herein cannot claim the benefit of gratuity under Payment of Gratuity Act, 1972. Respondent has already received pension under Municipal Council Pension Rules, 1980 and gratuity has also been accepted by the respondent under the same rules. Now he cannot turn around and claim payment of gratuity under Payment of Gratuity Act, 1972 and Municipal Council Pension Rules,1980. The Digitally signed by AMIT JAIN Date: 01/05/2020 10:16:43 3 Controlling Authority did not find the argument attractive. It was held by the Controlling Authority that the issue has already been decided by the Apex Court in the matter of Delhi Municipal Corporation Versus Dharam Prakash Sharma reported in A.I.R 1999 SC 293. In the said case, it has been held by the Apex Court that as per Section 5 of Payment of Gratuity Act, 1972, the power has been conferred on appropriate Government to exempt any establishment from operation of the provisions of the Act. Since Municipal Council of Delhi has not been exempted under Section 5 of Payment of Gratuity Act 1972, therefore, the provisions of Section 14 will be applicable and they will override the other provisions, which are contradictory or inconsistent with the provisions of Payment of Gratuity Act, 1972. It was also held that employee of Municipal Corporation of Delhi is entitled to get gratuity under Payment of Gratuity Act, 1972 and pension under Pension Rules of Municipal Council, Delhi. In the light of aforesaid judgment, the Controlling Authority allowed the claim of the respondent.

5. Leaned counsel appearing for the petitioner has raised similar arguments before this Court and has argued that respondent will be governed by Municipal Council Pension Rules,1980. The Controlling Authority has no jurisdiction to entertain the application filed by the respondent and the order is null & void being without jurisdiction. On the basis of said argument, learned counsel for the petitioner prayed for allowing this petition and quashing the order passed by Controlling Authority.

6. Considered the rival contentions made by learned counsel petitioner as well as respondent.

7. From perusal of Section 14 of Payment of Gratuity Act, 1972, it is clear that the provisions of Payment of Gratuity Act, 1972 will have overriding effect over other law if they are inconsistent with the Act. The Hon'ble Apex Court in the matter of Dharam Prakash Sharma (supra) has held that the employee of Municipal Corporation, Delhi is entitled to get gratuity under Payment of Gratuity Act,1972. In the present case also, no notification has been issued by the appropriate Government under Section 5 of Payment of Gratuity Act, 1972 that provisions of Payment of Gratuity Act, 1972 are not applicable on Municipal Council of Damoh. In view of the aforesaid pronouncement of law rendered in Dharam Prakash Sharma (supra), Section 14 will operate with full force and the employees of Municipal Council of Damoh are entitled to get gratuity under Payment of Gratuity Act, 1972.

8. Learned counsel for the petitioner has also raised objection that the heavy interest for delayed payment has wrongly been imposed upon the petitioner. Petitioner had already made payment of gratuity to the private respondent and there is no delay on their part. Private respondent had filed claim application for payment of gratuity as per Payment of Gratuity Act, 1972. In this case, the private respondent has been retired from service in the year 2008 and he had filed application for payment of gratuity before the Controlling Authority on 23.8.2016. Interest can only be awarded from the date when the claim is made by the private respondent and not from the date of superannuation.

9. In view of the above, the interest of 10% will be applicable on the difference of gratuity amount from the date on which the claim application has been filed by the private respondent and not from the date of superannuation.

10. In view of the aforesaid, this petition filed by the petitioner is partly allowed.

(Vishal Dhagat) Judge amit Digitally signed by AMIT JAIN Date: 01/05/2020 10:16:43