Central Administrative Tribunal - Madras
W Doraikkannu vs M/O Railways on 19 October, 2023
1 OA 1671/2017 & OA 968/2018
CENTRAL ADMINISTRATIVE TRIBUNAL
CHENNAI BENCH
OA/310/01671/2017 & OA/310/00968/2018
Dated the 19th day of October Two Thousand Twenty Three
CORAM : HON'BLE MS. LATA BASWARAJ PATNE, Member (J)
HON'BLE MR. VARUN SINDHU KUL KAUMUDI, Member (A)
OA 1671/2017:-
N.Shanmugasundaram,
Rtd. Station Manager,
Plot No. 6, Natarajapuram,
Guduvancheri. ....Applicant
By Advocate M/s. Ratio Legis
Vs
1.The Union of India rep by,
The General Manager,
Southern Railway,
Park Town, Chennai 600003.
2.The Chief Personnel Manager,
Southern Railway,
Park Town, Chennai 600003. ....Respondents
By Advocate Mr. M. Kishore Kumar, SPC
OA 968/2018 :-
W.Doraikkannu,
Retd Technician I,
No. 25B, Perumal Koil Street,
Muthaiya Nagar,
Mutharasanallur, Trichy. ....Applicant
By Advocate M/s. Ratio Legis
2 OA 1671/2017 & OA 968/2018
Vs
1.The Union of India rep by,
The General Manager,
Southern Railway,
Park Town, Chennai 600003.
2.The Chief Workshop Manager,
Central Workshop, Personnel,
Ponmalai, Trichy. ....Respondents
By Advocate Mr. A.Abdul Ajees
3 OA 1671/2017 & OA 968/2018
ORDER
(Pronounced by Hon'ble Mr. Varun Sindhu Kul Kaumudi, Member(A)) Since the issue involved and the subject matter as well as the relief prayed for are similar, a common order is being passed in these two OAs.
2. The applicants have prayed for the following reliefs :-
"OA 1671/2017:-
To call for all the records related to the impugned order No. P(S)353/II/OA 1167/2017 dated 22/09/2017 and to quash the same and further to direct the respondents to arrange to pay retirement gratuity determined in terms of Gratuity Act in place of that already paid under Railway Pension Rules with other attendant benefits with admissible interest and to pass such other order/orders as this Hon'ble Tribunal may deem fit and proper and thus to render justice.
OA 968/2018 :-
To call for all the records related to the impugned order No. GPB/353/O.A.No. 1809/2017 of 24.03.2018 and to quash the same and further to direct the respondents to arrange to pay retirement gratuity as determined in para 4.6 of the OA in terms of Gratuity Act, 1972 in place of that paid under Railway Pension Rules with other attendant benefits with admissible interest and to pass such other order/orders as this Hon'ble Tribunal may deem fit and proper and thus to render justice."
3. The brief facts of the case are as under:-
OA 1671/2017:-
The applicant retired as Station Manager on 30.06.2016 on superannuation. Pursuant to his retirement, his retirement gratuity was calculated with reference to the Railway Services (Pension) Rules, 1993, to the tune of Rs. 11,89,650/-, whereas when the same was calculated in terms of Section 4 of the Gratuity Act, 1972, it was found to be much higher to the tune 4 OA 1671/2017 & OA 968/2018 of Rs. 13,72,673/-. He submitted representation, dt. 11.01.2017, requesting the respondents to determine his retirement gratuity in terms of the Gratuity Act, 1972, and arrange to pay the difference amount of Rs. 1,83,020/-. The said representation evoked no response. He filed OA No. 1167/2017 before this Tribunal which was disposed of vide order, dt. 21.07.2017, with direction to the respondents to consider the applicant's representation, dt. 11.01.2017. The respondents passed the impugned order, dt. 22.09.2017, rejecting the applicant's request. Aggrieved, the applicant has filed this OA.
OA 968/2018:-
The applicant retired as Technician I on 31.12.2014 on superannuation. Pursuant to his retirement, his retirement gratuity was calculated with reference to the Railway Services (Pension) Rules, 1993, whereas the same had to be calculated in terms of Section 4 of the Gratuity Act, 1972, by which it is found to be much higher to the tune of Rs. 5,61,768/-. He submitted representation, dt. 11.01.2017, requesting the respondents to determine his retirement gratuity in terms of the Gratuity Act, 1972, and to arrange to pay the difference amount.
The said representation evoked no response. He filed OA No. 1809/2017 before this Tribunal which was disposed of, vide order, dt. 23.11.2017, with direction to the respondents to consider the applicant's representation, dt. 11.01.2017. The respondents passed the impugned order, dt. 24.03.2018, rejecting the applicant's request. Aggrieved, the applicant has filed this OA.
5 OA 1671/2017 & OA 968/2018
4. The main grounds raised by the applicants in support of their claims are as under:-
i. The impugned orders denying determination of gratuity with reference to the statutory provisions of the Payment of Gratuity Act, 1972, are arbitrary and against the law.
ii. Section 5 of the Gratuity Act, 1972 enables issuance of notification of exempting establishments where the employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act and in the instant case the retirement gratuity of the applicants determined under the Railway Services Pension Rules is found to be less beneficial, as well as the Railway Establishment could not be exempted under the said Section 5 of the Gratuity Act, 1972. Hence, the impugned orders, dt. 22.09.2017 and 24.03.2018, rejecting beneficial determination of gratuity in terms of the Gratuity Act, 1972, are liable to be quashed.
iii. In the absence of any notification regarding exemption from the application of the Gratuity Act, 1972, vide the the impugned orders, dt. 22.09.2017 and 24.03.2018, the respondents cannot deny the beneficial determination of gratuity in terms of the Gratuity Act, 1972, to the applicants. iv. The retirement gratuity determined under the Gratuity Act, 1972 is more favourable than that determined under the Railway Services (Pension) Rules in 6 OA 1671/2017 & OA 968/2018 the light of the fact that the power to exempt vested in the Central Government is subject to the condition that benefits under special provisions should not be less favourable, (and) the statutory provision under the Act shall prevail over the subsequent subordinate notification in terms of Sec. 14 of the Act and hence the impugned orders are non est in law.
5. The respondents have filed their reply contesting the claims of the applicants. It is submitted that the respondents have rightly calculated the applicant's gratuity as per Rule 70 of the Railway Services (Pension) Rules, 1993. As such, the gratuity was worked out to Rs. 11,89,650/- with regard to the applicant in OA No. 1671/2014, viz., N.Shanmugasundaram, and the same was paid to him. On similar lines, the retirement gratuity with respect to the applicant in OA 968/2018, viz., W. Doraikkannu, was calculated and arranged for payment as per eligibility under the Railway Services (Pension) Rules, 1993.
6. The applicants had submitted their representations, dt. 11.01.2017, requesting to determine their retirement gratuity in terms of the Gratuity Act, 1972, and to arrange to pay the difference amount. The applicants had filed OAs No. 1167/2017 and 1809/2017, which were disposed of, vide orders, dt. 21.07.2017 and 23.11.2017, respectively. The representations of the applicants were rejected by the authorities, vide impugned orders, dt. 22.09.2017 and 24.03.2018, respectively. They have been rightly paid their retirement gratuity as per the Rules 70 to 74 of the Railway Services (Pension) Rules, 1993. 7 OA 1671/2017 & OA 968/2018
7. As per Section 2(e) of the Payment of Gratuity Act, 1972, ""employee" means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity."
8. The applicants, being Railway employees, do not come under the purview of "the Payment of Gratuity Act, 1972", and are governed by the Railway Services (Pension) Rules, 1993. The respondents have relied upon the order of the Hon'ble Supreme Court in the case of Union of India Vs. Manicklal Banerjee, reported in 2006 SCC [L&S] 1959, wherein it was held that a person who holds a post under the Central Government was not governed by the Gratuity Act, 1972 and, therefore, the applicants are covered under the Railway Services (Pension) Rules. The Hon'ble Supreme Court has further observed that, "the interpretation clause in Section 2 (e) takes out from the purview of the said Act a person who holds, inter alia, posts under the Central Government whose terms and conditions of service are governed by an Act or the Rules providing for payment of gratuity. The 1993 Rules provide for 8 OA 1671/2017 & OA 968/2018 payment of gratuity as per Rule 70." Section 2 (20) in Chapter 1 of the Railways Act, 1989, defines "Government Railway" as 'a railway owned by the Central Government'. Further, the Railway Act defines "railway administration"
in relation to a Government Railway as the "General Manager of a Zonal Railway" and "railway servant" as "any person employed by the Central Government or by a railway administration in connection with the service of a railway". Hence, the applicants who were government servants were covered under the Railway Services (Pension) Rules, 1993, and were not covered by the Payment of Gratuity Act, 1972. The applicants cannot invoke the Gratuity Act, 1972 when they do not have any legal monetary right or any legal status. The claim of the applicants falls within the ambit of service matter, as defined in section 3(q) of the Administrative Tribunals Act, 1985. As per Chapter 1, Rule 2(4) of the Railway Services (Pension) Rules, 1993, "any person entering a railway service on or after the 16th November, 1957, except a person who is appointed on contract or re-employed after superannuation or whose terms of appointment specifically provide to the contrary", shall be governed by the Railway Services (Pension) Rules, 1993. Since the applicants entered the railway services after the 16th November, 1957, they are squarely covered under the Railway Services (Pension) Rules, 1993, and the Payment of Gratuity Act, 1972, does not apply to them. Accordingly, the respondents have prayed for dismissal of the OA.9 OA 1671/2017 & OA 968/2018
9. Heard both sides and perused the records.
10. Under Section 2(e) of the Payment of Gratuity Act, 1972, ""employee" means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity." (emphasis added). Further, the respondent is not a Railway Company as defined under the Indian Railways Act, 1890. Therefore, the applicants are not employees as per Section 2(e) of the Payment of Gratuity Act, 1972. The applicants were holding civil posts in the Union of India, under the Ministry of Railways, and, hence, they are not governed by the Payment of Gratuity Act, 1972. They are clearly governed by the Railway Services (Pension) Rules, 1993. Section 2(e) of the Gratuity Act, 1972 would not become applicable when a person is eligible for Death-cum-Retirement Gratuity under the Railway Services (Pension) Rules, 1993.
11. Learned counsel for the applicants has relied upon the order in WP No. 46017/2017 and connected Writ Petitions. The overriding effect of Section 14 of 10 OA 1671/2017 & OA 968/2018 the Gratuity Act, 1972, is that payment of gratuity is in the interest of employees and that gratuity would be payable to the employees. But, the exclusion made in the latter part of Section 2(e) of the same Act cannot be ignored in this case.
12. The applicants cannot enjoy terminal benefits under the Payment of Gratuity Act, 1972 as well as the Railway Services (Pension) Rules, 1993. The respondents have contended that, even assuming (but not admitting) that the applicant is covered under the Payment of Gratuity Act, 1972, he will get Gratuity under the provisions contained in Section 4(2). However, we need not go into that calculation at all.
13. It is admitted fact that the applicants have joined railway service in the year 1981 and 1978, and they retired in the years 2016 and 2014, respectively. As per their representations, dt. 11.01.2017 and 11.01.2017 (same date for both), "pension and retirement gratuity, etc., were arranged in terms of Railway Services (Pension) Rules, 1993." Now, both have represented for splitting the benefits under the Railway Services (Pension) Rules, 1993, and the Payment of Gratuity Act, 1972. Such a request is absurd, as one can be a beneficiary under only one set of rules, under the extant provisions. The applicants cannot enjoy one portion of the benefits under the Railway Services (Pension) Rules, 1993 and the remaining part as per the Payment of Gratuity Act, 1972. There is no such provision as per law and the decision of the Hon'ble Apex Court is quite clear in this respect.
11 OA 1671/2017 & OA 968/2018
14. By orders, dt. 22.09.2017, of the Chief Personnel Officer, Southern Railways, and, dt. 24.03.2018, of the Chief Workshop Manager, Southern Railways, the representations of the applicants were disposed of, on the orders of this Tribunal in OA Nos. 1167/2017 and 1809/2017.
15. The Headquarters Office, Personnel Branch, Chennai of the Southern Railways, in the communication, dt. 22.09.2017, to Shri. N. Shanmugasundaram (applicant in OA 1167/2017), while turning down his request, has clearly mentioned, ".....
The Hon'ble Supreme Court of India in Union of India Vs Manicklal Banerjee [2006 SCC [L&S] 1959] has held that interpretation clause contained in Sec 2(e) of The Payment of Gratuity Act, 1972 takes out from the purview of the said Act, a person who holds inter alia post under the Central Government and whose terms and conditions of service are governed by an Act or the Rules providing for payment of gratuity.
The applicant is holding a post under Central Government and governed by Railway Services (Pension) Rules, 1993 for payment of Death Cum Retirement Gratuity is therefore not covered under the Payment of Gratuity Act, 1972.
The applicant having got all the benefits under the Railway Services (Pension) Rules, 1993, cannot now contend that he is governed by the Payment of Gratuity Act, 1972.
In the light of all the above it is clear that the applicant is excluded from the purview of the Payment of Gratuity Act, 1972 and hence his request cannot be accepted."
16. The Central Workshop, Personnel Branch, Ponmalai, of the Southern Railways, in the communication, dt. 24.03.2018, to Shri. W. Doraikkannu (applicant in OA No. 1809/2017), while rejecting his representation, has explained as follows:-
12 OA 1671/2017 & OA 968/2018
"..........you do not come under the purview of "payment of Gratuity Act 1972"
as you are employed in Railways (a Central Government Organisation) and are governed by the Railway Pension Rules 1993 which provide for payment of gratuity.
In a similar case Hon'ble Supreme Court {UOI vs Manicklal Banerjee
- 2006 SCC [L&S] 1959} has observed as under:-
".......The definition, thus, excludes an employee holding civil post under the Central Government and governed by another Act or Rules providing for gratuity........."
The Railways Act, 1989 defines "Government railway" as 'a railway owned by the Central Government'. Further the Railway Act defines "railway administration" in relation to a Government Railway as 'the General Manager of a Zonal Railway and "railway servant" as 'any person employed by the Central Government or by a railway administration in connection with the service of a railway'.
As per the above definition of Railways Act a railway servant is an employee of Central Government and therefore the Payment of Gratuity Act 1972 is not applicable to him.
Further as per Chapter I - Rule 2(4) of Railway Services (Pension) Rules 1993, the said rules shall apply to any person entering a railway service on or after the 16th November 1957. Further under the head Definitions under Rule 3 of the said Rules, sub-rule 19 defines "pension" as including gratuity except when the terms pension is used in contra distinction to gratuity but does not include dearness relief.
Thus, even assuming as correct, your contention that you are eligible for Gratuity under Payment of Gratuity Act, 1972, then you would not be eligible for Pension under the Railway Services (Pension) Rules 1993, as it has been laid down under Rule 3 (19) of the RS (Pension) Rules 1993 that pension includes Gratuity. The same view has been taken by the Hon'ble Gujarat High Court in the case of Rajkot Municipal Corporation vs. Aniruddh Fulshankar Shukla decided on 19.04.1999.
In view of the above you are not eligible for Gratuity under the payment of Gratuity Act 1972 as the same is not applicable to you." 13 OA 1671/2017 & OA 968/2018
17. The above orders, rejecting the claims of the applicants are found to be well reasoned and based on the pronouncements of the Hon'ble Apex Court. As far as the ratio of the judgment relied upon by the applicants is concerned, it is not applicable to the facts of the applicants' case. Hence, we find no grounds for interference with the impugned rejection orders. The OAs are, accordingly, dismissed.
18. No order as to costs.
(Varun Sindhu Kul Kaumudi) (Lata Baswaraj Patne)
Member (A) Member (J)
19.10.2023
SKSI