Calcutta High Court (Appellete Side)

Paschim Banga Gramin Bank & Ors vs Chinmay Majumdar & Ors on 4 February, 2021

IN THE HIGH COURT AT CALCUTTA
                Civil Appellate Jurisdiction
                      Appellate Side

Present :

The Hon'ble Justice Arindam Sinha
            And
The Hon'ble Justice Suvra Ghosh



                       F.M.A. 657 of 2020


            Paschim Banga Gramin Bank & Ors.
                           Vs.
                  Chinmay Majumdar & Ors.


For appellants: Mr. Biswaroop Bhattacharya, ld. Adv.,
                            Ms. Surasri Baidya, ld. adv.

For respondents: Mr. Debabrata Saha Roy, ld. Adv.,

Mr. Indranath Mitra, ld. Adv., Mr. Subhankar Das, ld. Adv.,

Heard on : 4th February, 2021.

Judgment on : 4th February, 2021.

Arindam Sinha, J.: The appeal has been heard, earli-

er as well as today.

Mr. Bhattacharya, learned advocate appears on be-

half of appellants and submits, regulation 72 in Paschim Banga

Gramin Bank (Officers and Employees) Service Regulations, 2010

has three provisos under sub-regulation (2). The third proviso is

for additional inclusion of dearness, special and officiating al-

lowances, payable during 12 months preceding death, disability,

retirement, resignation or termination of service, as the case may

be, for calculation of gratuity in respect of employees. Respon-

dents are officers.

He relies on judgment of Supreme Court in Khoday

Distilleries Limited - vs - Sri Mahadeshwara Sahakara

Sakkare Karkhane Limited, Kollegal reported in (2019) 4 SCC

376, paragraphs 18 to 24, to submit there is no merger caused

by order dated 7th May, 2019 passed by Supreme Court in Peti-

tion(s) for Special Leave to Appeal (C) no(s).11113 -

11115/2019 (Madhyanchal Gramin Bank & anr. Etc. - vs - All

India Gramin Bank Pensioners Organisation Unit, Rewa Etc.).

As such, decision of the High Court, on not having been inter-

fered with on dismissal of the Special Leave Petitions, does not

cause the Madhya Pradesh High Court's judgment to have been

confirmed by the Supreme Court and be a binding precedent on

this Court. He then relies on judgment dated 6th January,

2020 of a learned single Judge of Bombay High Court, Nagpur

Bench in, inter alia, Writ Petition no.8272 of 2018 (Vidarbha

Konkan Gramin Bank - vs - The Appellate Authority and

Anr.), paragraph 18. He also relies on Maniruddin - vs - Chair-

man of Dacca reported in 40 CWN 17 to submit, statutory bod-

ies have no power to do anything unless power to do so is con-

ferred by statute. Here the proviso is clear in the context of its

application to employees only.

Mr. Saha Roy, learned advocate appears on behalf of

respondents and submits, his clients need only to rely on second

proviso under sub-regulation (3) in regulation 72. The proviso

entitles his clients, as officers, to be paid additional amount of

gratuity based on last pay drawn. He submits, pay includes, in-

ter alia, emoluments. Emoluments have been defined to be ag-

gregate of salary and allowances and salary means aggregate of

pay and dearness allowance. As such, dearness allowance is part

of the package, for calculation of additional amount of gratuity, in

respect of his clients being officers. He relies on views of learned

single Judges of High Court of Chhattisgarh and High Court of

Judicature for Rajasthan, by respective judgment dated 31st

August, 2020 in, inter alia, Writ Petition (L) no.55 of 2020

(Chhattisgarh Rajya Gramin Bank vs. Meghraj Pathak & Ors.

and judgment dated 16th October, 2020 in S.B. Civil Writ Pe-

tition no.7359 of 2019 (Rajasthan Marudhara Gramin Bank

vs. The Appellate Authority).

Here we would like to extract from our order dated

20th January, 2021, made in course of the hearing.

"We record what we have noticed. Clause (m) in defi-

nitions regulation 2 gives meaning of 'pay' to include

emoluments, which may specifically be classified as

pay under the Regulations. We have not been shown

specific classification of emoluments as pay in the

Regulations."

Mr. Saha Roy, before making submissions on emolu-

ments being specifically classified in the Regulations, draws at-

tention to clause (e) of definitions section 2 in Payment of Gratu-

ity Act, 1972, giving meaning of 'employee' as any person em-

ployed for wages. He relies on clause (s) in the section for mean-

ing of 'wages', to be, all emoluments earned by an employee while

on duty or on leave, to include, inter alia, dearness allowance.

He then relies on section 14:-

"14. Act to override other enactments, etc. The provisions of this Act or any rule made thereunder shall have effect notwithstanding

anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act."

He submits, on date of retirement, gratuity in respect of his

clients stood capped at Rs.10 lakhs. Turning to pages 63 and 64

of the paper book he demonstrates, gratuity calculated under the

Act was in excess of Rs.10 lakhs, in respect of two respondents.

So also in respect of other respondents. Hence, employer bank

paid out Rs.10 lakhs to each respondent.

He turns to regulation 72 and submits, the provision

is beneficial in the matter of payment of gratuity, to be the

amount on calculation under the Act or the Regulations, which-

ever is higher. His submission, calculation under the Regula-

tions would yield a higher figure than Rs.10 lakhs and that, per

regulation 72, is the entitlement of each respondent. Appellant

bank has paid out Rs.10 lakhs each in purportedly showing cal-

culation of gratuity against each respondent to be higher as per

the Act.

To answer the query, he draws attention to clause (c)

in regulation 10 and sub-regulation (2) in regulation 66. They

are set out below:-

"10. Termination of Service by Notice. 1(a)................

(b)..................................................... (c ) In case of breach of clause (b) of sub- regulation (1), an officer or employee shall be liable to pay to the Bank as compensation a sum equal to his pay for the period of notice required by him."

"66. Paternity Leave.(1)...........

(2) During such period of 15 days, the male officer or employee shall be paid leave salary equal to the pay drawn immediately before proceeding on leave." (emphasis supplied)

With reference to the above he submits, clause (c) in regulation 10

and sub-regulation (2) in regulation 66, both use expression 'pay'.

Clause (m) in definition regulation 2 gives meaning of 'pay' while

clause (o) says 'salary' means aggregate of pay and dearness

allowance. Clause (i) defines 'emoluments' to mean aggregate of

salary and allowances. He submits further, deduction made by

appellant bank on leave salary under regulation 66 has been

salary equal to pay. According to him, the bank has itself

interpreted word 'pay' in regulations 10 and 66 as classification of

emoluments as pay, by and under the regulations. This is

because it is so.

He relies on judgment dated 6th September, 2018

by a learned Single Judge of High Court of Madhya Pradesh in,

inter alia, WP 9182 of 2017 (All India Gramin Bank Pensioners

Organization Unit Rewa - vs. - Madhyachal Gramin Bank &

another), paragraphs 18 to 24. Special Leave Petition against dis-

missal of appeal therefrom, stood dismissed as aforesaid. In the

premises, there is no controversy regarding merger, as parties ap-

pear to have accepted the declaration of law in Khoday Distil-

leries Ltd. (supra). We think fit to reproduce paragraph 20 from

judgment dated 6th September, 2018 (supra).

"(20) A microscopic reading of Regulations show that there exists no provision whereby any part of emolument may specifically be clas-

sified as pay. This expression- any part of emoluments which specifically be classified as pay needs interpretation. In my view, a conjoint reading of definition of "pay", "emoluments" & "salary" is required for proper interpretation of the meaning of "pay" or the said highlighted ex- pression. It is important to note that "emolu- ments" is aggregate of salary and allowance "salary" is aggregate of pay and dearness al- lowance. Thus, said three definitions are deeply interlinked and correct meaning of said expres- sion can be drawn by combined reading of said three provisions. The definition of "pay" refers about emolument, whereas emolument includes salary which includes pay and dearness al- lowance. Thus, dearness allowance is specifi- cally classified and must form part of pay be- cause the said definitions are closely interwo- ven. Otherwise, expression leads to an absurdi- ty and impossibility. Absurdity, inconsistency and impossibility because in the Regulations there exists no provision for undertaking such exercise of specially classifying an emolument as pay." (emphasis supplied)

Prayer in the writ petition was for recalculation of en-

titlement to gratuity amount of respondents, taking into consider-

ation all components of emoluments. By impugned order, inter

alia, following was said:-

"(10). In light of the above, I hold that the peti- tioners shall be entitled to gratuity based on a calculation that would include 'dearness al- lowance' in the "last pay". The respondents are directed to include the dearness allowance and recalculate the gratuity of the petitioners and pay the difference arising thereto to the petition-