Document Fragment View

Matching Fragments

W.A. No.1 of 2015 & connected cases

22. Submission which has been much pressed by the learned counsel for the appellants is that Rule 14 framed by the Council is not protected by Section 4(5). It is submitted that the said Rules and Regulations cannot be treated as an award, agreement or contract. Whether the Rules and Regulations framed by the Council for governing service conditions of its Scientists and employees can be treated as better terms of gratuity under contract with the employer, is the key question to be answered. If it is held that Rule 14 offer better payment of gratuity receivable by an employee, it shall automatically override the ceiling under Section 4(3).

16. Sub-section (5) of Section 4 of the Gratuity Act permits an employee to be regulated for the purpose of gratuity under an alternative provision/arrangement (award or agreement or contract), other than the Gratuity Act. In such an eventuality, sub-section (5) aforesaid assures the employee concerned, ".... to receive better terms of gratuity under any award or agreement or contract with the employer". Since the appellant's claim for gratuity is regulated under the 1995 Regulations, it is evident that his claim for gratuity is liable to be determined by ensuring his right to better terms than those contemplated under the Gratuity W.A. No.1 of 2015 & connected cases Act. In the instant process of consideration, the aforesaid conclusion, namely, that an employee who receives gratuity under a provision other than the Gratuity Act, would be entitled to better terms of gratuity, will constitute one of the foundational basis of determination. Having examined Section 4 of the Gratuity Act, we may unhesitatingly record that none of the other sub-sections of Section 4 of the Gratuity Act, as well as the other provisions of the Gratuity act, have the effect of negating the conclusion drawn hereinabove."

A perusal of Section 14 leaves no room for any doubt that a superior status has been vested in the provisions of the Gratuity Act vis-a-vis any other enactment (including any other instrument or contract) inconsistent therewith. Therefore, insofar as the entitlement of an employee to gratuity is concerned, it is apparent that in cases where gratuity of an employee is not regulated under the provisions of the Gratuity Act, the legislature having vested superiority to the provisions of the Gratuity Act over all other provisions/enactments (including any instrument or contract having the force of law), the provisions of the Gratuity Act cannot be ignored. The term "instrument" and the phrase "instrument or contract having the force of law" shall most definitely be deemed to include the 1995 Regulations, which regulate the payment of gratuity to the appellant.

54. Thus in cases of payment of gratuity to the employees of the Co-operative Bank as noted above if under the Scheme/policy there is no ceiling limit provided for gratuity, the courts have held that employees are entitled to receive the amount without any limit as per the policy. However, it was further held that if the policy is taken providing a ceiling limit as provided under Section 4(3), the employees cannot claim any amount over and above.

55. In the cases before us the payment of gratuity is regulated by Rule 14 as quoted above. Rule 14 does not contain any provision by which any ceiling limit to the payment of gratuity is provided, as provided under Section 4 (3) of 1972 Act. With regard to employees of Kerala Forest Research Institute there was an internal arrangement with LIC for payment of gratuity and from the materials on record it is proved that LIC has been making payment of gratuity to the employees without any ceiling limit as provided under Section 4(3). We have already noticed that payment of W.A. No.1 of 2015 & connected cases gratuity of Rs.15 lakhs to Dr C.Renuka and Dr George Mathew in W.P.(C) No.25884 of 2011 was paid in the year 2011 by the cheque issued by LIC. We thus conclude that Clause 14 of the rules and regulations framed by the Council provides for better terms of gratuity under the contract of service with the employer and payment of gratuity to writ petitioners was fully protected by Section 4(5) of the Act and the ceiling of Rs.10 lakhs as on date as provided under Section 4(3) was not applicable in payment of gratuity to the writ petitioners. The learned Single Judge did not commit any error in directing payment of gratuity to the petitioners disregarding the ceiling as prescribed in Section 4(5) of the Act.