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3. Learned advocate Ms. Jhaveri appearing on behalf of petitioner Nagarpalika submitted that Section 2(e) of the Act provides definition of "employee". She further submitted that the Nagarpalika is having its own gratuity rules, therefore, the provisions of the Act are not applicable to the concerned employees. The Rules framed by the petitioner Nagarpalika have been approved by the State Government as per Annexure-B to the petition. She relied upon Rule 5 which provides the mode of calculation of the amount of gratuity to the concerned employee. According to her, as per the Rules, the amount of gratuity is paid to the concerned employee. Therefore, no payment is to be made by petitioner to the concerned employees. She also raised contention that petitioner Nagarpalika being a local authority and therefore, provisions of the Act are not applicable. She also submitted that the controlling authority has not considered the Gratuity Rules which are at Annexure-B and relying upon the provisions of the Act, the controlling authority decided the issue against the petitioner Nagarpalika. Section 2(e) of the Act reads as under:

3.2 Learned advocate Ms. Jhaveri also submitted that concerned employees are governed by separate gratuity rules sanctioned/approved by the State Government and therefore, concerned employees are not entitled to the benefits as provided under the Act. She further submitted that respondents employees are governed by BCSR Rules and therefore, the Act is not applicable.

4. Learned advocate Mr. A.K. Clerk appearing on behalf of respondents submitted that the contentions raised by learned advocate Ms. Jhaveri were not raised before the controlling authority by the petitioner. Therefore, these contentions for the first time before this Court and therefore, petitioner may not be permitted to raise said contentions. He also submitted that there is a delay of more than 3 years in filing the petitions after the order passed by the controlling authority and petition was filed after completion of period of appeal. Therefore, according to him, there is inordinate delay in filing the present petitions by the petitioner. He also raised contention that against the order of the controlling authority under Section 7(7) of the Act, appeal is available to the petitioner but, no appeal was preferred and straightway, petitions were filed after inordinate delay. Therefore, all the petitions are required to be dismissed. He also raised contention that definition of "employee" is given in Section 2(e) of the Act, would not be applicable in the present case because exclusion of employee should satisfy two conditions; one is that he holds a post under the Central Government or State Government and secondly he is governed by any other Act or Rules. Meaning thereby that both the conditions are required to be satisfied and then only, such person cannot be considered as an employee under Section 2(e) of the Act. He submitted that respondents employees were not holding any post either in State Government or Central Government and mere framing of the Rules, would not attract exclusion under Section 2(e) of the Act in case of present respondents employees. He also submitted that though two rules are in operation, then also provisions of the Act are applicable as decided by the Himachal Pradesh High Court in case of State of Himachal Pradesh v. Lashkari Ram reported in 2008-I-LLJ-137. He further submitted that Gratuity Act provides better terms to the employee to receive the gratuity amount. Therefore, if said Act is applicable, then concerned employee can claim gratuity on better terms and accordingly, claims were made by respondents employees under the Act. He relied upon the decision of Apex Court in case of Jashwant Singh Gil v. Bharat Coking Coal Ltd. and Ors. reported in (2007) 1 SCC 663. Along with affidavit in reply, copy of a resolution is produced at Page-19. As per said resolution, in case of Champaklal Kavat, an order was passed by controlling authority under the Act, against which appeal was preferred and ultimately, a petition was filed by Nagarpalika challenging the order passed by appellate authority. Finally the petition filed by the Nagarpalika was dismissed and the payment was made to said Champaklal Kavat. He also submitted that similarly, in case of Chhanalal, subsequently it was decided to make the payment when controlling authority has passed an order in favour of Shri Chhanabhai. He also submitted that in view of the above, a resolution was passed by Nagarpalika resolving that now in case of any employee, the decision of the controlling authority should have to be implemented in favour of concerned employee by paying gratuity amount. He also submitted that another petition is also filed by concerned employees seeking direction from this Court to direct the statutory authority to recover the amount of gratuity from the petitioner and therefore, some suitable direction may be issued to such statutory authority so that they may recover the remaining amount with interest from the petitioner.

13. It is necessary to note that though remedy of appeal is available to the petitioner under Section 7(7) of the Act, no appeal was preferred by the petitioner and straightway, petitions were filed after a period of more than 2 years.

14. However, other contention raised by learned advocate Ms. Jhaveri is in respect to Rules framed by the Nagarpalika, which has been sanctioned by the Government of Guajrat, while exercising power under Section 271(a) of the Gujarat Municipalities Act, 1963. Accordingly, she relied upon Rule-5 which for the purpose of calculation of gratuity only basic pay as defined under BCSR Rules will be taken into account exclusive of dearness allowance. The gratuity will be paid on the basis of the average of last 12 months pay preceding the date of the relieve from service. The contention is that because the concerned employee is governed by BCSR Rules and Gratuity Rules as referred above, provisions of the Act are not applicable. The Himachal Pradesh High Court has considered this aspect in the case of State of Himachal Pradesh v. Lashkari Ram reported in 2008-I-LLJ-137 wherein after considering the definition of "employee" under Section 2(e) of the Act and after considering the Central Civil Services Rules (Pension), 1972 and employee having worked in different capacity, was held to be entitled to get benefits of Gratuity Act as well as Civil Service Rule (Pension) Rules. Whether Rules prevailed or the Act, that question was also examined by the Apex Court in case of Jashwant Singh Gill (supra). The Apex Court has considered the Rules framed by the Bharat Coking Coal Ltd. are not statutory rules and they have been made by the holding company of respondent No. 1. The Payment of Gratuity Act was enacted with a view to provide for a scheme for payment of gratuity to the employees engaged inter alia in mines. The Act provides for close - knit scheme providing for payment of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which he may be denied therefrom. A statutory right accrued, thus, cannot be impaired by reason of a rule which does not have the force of a statute. The provisions of the Act, therefore, must prevail over the Rules.

14. The further contention that the employee ought to have had recourse to remedies prescribed under the provisions of Act is also not tenable. The employee is certainly entitled to elect his remedy, in the absence of a bar.

20. The Karnataka High Court has, in case of Ratnakar Rao U. v. Union of India and Ors. reported in 2003-II-LLJ-336, observed that, 'Payment of Gratuity Act, 1972 Section 2(e) - New Mangalore Port Trust (Adaptation of Rules) Regulations, 1980 - Regulation 4 - Central Civil Services (Pension) Rues,1972 - Rule 50 - Gratuity Act not applicable to person governed by Act or Rule providing for payment of gratuity - Regulation 4 of Port Trust Regulations made Central Pension Rules applicable to its employees - Denial of gratuity as per Central Pension Rules therefore held not proper and payment of balance with interest at 12% ordered.