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Council, were in terms of Exts.P1 and P2. After the formation of the 1st respondent-Council, conditions of service including payment of W.P.C.2241/12 & 25584/11 etc. - : 3 :-

gratuity and other benefits have been regulated in terms of the aforementioned service rules framed for the functioning of the 1st respondent-Council, which came into force on 19.6.2003. Ext.P3 is the relevant extract of those rules insofar as it regulates the payment of gratuity. Rule 14 of Section 2 of Part 1 of those rules which are extracted in Ext.P3, reads as follows:

2. Though Section 4(3) of the Payment of Gratuity Act, 1972, (Central Act 39 of 1972) envisages a maximum limit of W.P.C.2241/12 & 25584/11 etc. - : 5 :-

Rs. 10 lakhs (with effect from 24.5.2010) for payment of gratuity, the rules in the 1st respondent and the 3rd respondent, as evidenced by Ext.P3, do not place any ceiling limit on the maximum gratuity payable and the gratuity is computable purely in terms of the formula mentioned in Note. (ii) appended under Rule 14.1 of the above said Ext.P3 rules. It is also common ground that even prior to the formation of the 1st respondent-Council, the research institutes like the 3rd respondent-KFRI, have been following the same formula for payment of gratuity in terms of Exts.P1 and P2, wherein also there was no maximum ceiling limit for payment of gratuity amount.
petitioners and that the same cannot be deprived of, unless the provisions in Ext.P3 rules are amended in the manner known to law. It is further contended that though Section 4(3) of the Payment of Gratuity Act lays down a ceiling limit of gratuity amount payable at Rs. 10 lakhs (with effect from 24.5.2010), it is mandated in Section 4(5) of the said Act that nothing in Section 4 shall affect the right of an employee to receive better terms of gratuity under an award or agreement or contract with the employer. In this regard, it is contended that the provisions in Ext.P3 relating to gratuity are the terms and conditions that regulate the contract of service/contract of employment between the employees like the petitioners and the employer concerned like the 1st and 3rd respondents. That in view of the provisions in Section 4(5), as there is no ceiling limit for the payment of gratuity in terms of Ext.P3 rules, higher amount of gratuity payable in terms of Ext.P3 than the amount mentioned in Section 4(3), is fully permissible in law. That the right conferred on the employee concerned in terms of Section 4(5) of the Payment of Gratuity Act has been flagrantly violated by virtue of the impugned decision limiting gratuity at Rs.10 lakhs. It is also contended that as contemplated by the Parliament in terms of Section 4A(1) of the W.P.C.2241/12 & 25584/11 etc. - : 10 :-
issue directions to the Council, which the latter is obliged to comply.

13. It is common ground that Ext.P3 rules do not stipulate any ceiling limit for payment of gratuity amount. It is admitted by the respondents that the provisions in Ext.P3 rules have not been amended till date as prescribed in the aforementioned Rule 19 and that those provisions stand without any alteration till date. If the State Government is also of the considered opinion that there should be a ceiling limit for payment of gratuity amount as envisaged in Section 4(3) of the Act or as stipulated by the Central Government in its pay revision orders for CSIR scales of pay personnel, it was for them through their representatives in the Council and the Executive Committee to put in motion the process of amendment of Ext.P3 rules so as to incorporate the provision for having a ceiling limit for gratuity in the manner deemed fit and proper by them so as to get the above said Rules amended by following the mandatory procedure prescribed by Rule 19 thereof. This course of action has not been adopted and the provisions in Ext.P3 rules stand unaltered. Then the question is that as to whether, in spite of the provisions in Ext.P3 rules, the Government has power to interdict the gratuity payment against the aforesaid W.P.C.2241/12 & 25584/11 etc. - : 21 :-