Mahanagar Telephone Nigam Ltd. vs Smt. Shakuntla Rekhi & Anr.
2008 Latest Caselaw 1458 Del

                                              REPORTABLE
*        IN THE HIGH COURT OF DELHI AT NEW DELHI

%                           Date of Decision : August 27, 2008


+   WP(C) No. 128/2005

#   MAHANAGAR TELEPHONE NIGAM LTD.                       ...      Petitioner

!                            Mr. Dinesh Agnani, Advocate
                   Versus

$   SMT. SHAKUNTLA REKHI & ANR.                ...         Respondents.

^                            Mr. Mata Din, Advocate.

                             AND

+   WP(C) No.145/2005

#   MAHANAGAR TELEPHONE NIGAM LTD.                       ...      Petitioner

!                            Mr. Dinesh Agnani, Advocate
                   Versus

$   SH. RAM KUMAR GUPTA & ANR.               ...           Respondents.

^                            Mr. Mata Din, Advocate.

                             AND
+   WP(C) No.20097/2004

#   MAHANAGAR TELEPHONE NIGAM LTD.
                                                         ...      Petitioner

!                            Mr. Dinesh Agnani, Advocate
                   Versus

$   SH. MATA DIN & ANR.
                                                   ...         Respondents.

^                            Respondent No. 1 for himself and
                             also for respondent No. 2.
 CORAM :
HON'BLE MR. JUSTICE S.N. AGGARWAL

    1. Whether reporters of Local paper may be allowed to see the
       judgment?
    2. To be referred to the reporter or not?
    3. Whether the judgment should be reported in the Digest?

S.N. Aggarwal, J. (Oral)

The only short question that needs consideration in these

writ petitions is whether the provisions of Payment of Gratuity Act,

1972 are applicable to the respondents after they had exercised

their option to retain the pensionary benefits available to them

under the Government Rules.

2 Brief facts of the case giving rise to these petitions are as

follow:-

The respondents in all these three writ petitions were the

employees of Department of Telecommunication prior to their

absorption in the petitioner corporation (MTNL) w.e.f. 01.11.1998.

Prior to the absorption of the respondents in the MTNL, the

respondents were given an option either to retain the pensionary

benefits available to them under the Government Rules or to

receive pro-rata retirement benefits for the services rendered by

them under the Central Government and to be governed by the

rules of PSU w.e.f. 01.11.1998. The respondents in all these three

petitions exercised their option to retain the pensionary benefits available to them under the Government Rules presumably because

they were left with lesser period to serve the MTNL. All these three

respondents in the present writ petitions have retired from the

service of the MTNL on or around 2001. After their retirement, they

were paid gratuity under the CCS (Pension) Rules, 1972. The

respondents were not satisfied with the payment of gratuity made

to them under the CCS (Pension) Rules and therefore they filed

separate applications before the Controlling Authority under the

Payment of Gratuity Act, 1972 for payment of difference of gratuity

payable under the Payment of Gratuity Act, 1972. The Controlling

Authority vide its order dated 12.02.2004 held that the provisions of

Payment of Gratuity Act are applicable to the respondents and

therefore directed payment of difference of gratuity payable under

the CCS (Pension) Rules and that payable under the Payment of

Gratuity Act, 1972 to the said respondents. Aggrieved by the order

of the Controlling Authority, the petitioner (MTNL) preferred an

appeal before the Appellate Authority and the Appellate Authority

vide its order dated 02.11.2004 agreed with the decision of the

Controlling Authority and dismissed the appeal of the petitioner.

3 Aggrieved from the order of the Appellate Authority dated

02.11.2004, the petitioner has filed these three petitions seeking setting aside of the order of the Controlling Authority dated

12.02.2004 and also that of the Appellate Authority dated

02.11.2004. The case of the petitioner is that the respondents are

governed by the provisions of CCS (Pension) Rules and not by the

provisions of Payment of Gratuity Act, 1972 in view of option

exercised by them to retain the pensionary benefits available to the

Central Government employees.

4 Mr. Agnani, learned counsel appearing on behalf of the

petitioner has contended that in case the respondents would have

exercised the second option of getting pro-rata retirement benefits

for the services rendered by them under the Central Government

and to be governed by the rules of PSU w.e.f. 01.11.1998, in that

event the petitioner would have paid them gratuity as per the

provisions contained in the Payment of Gratuity Act, 1972 for the

period of service rendered by them with the MTNL. In the present

case, it is not disputed by counsel appearing on behalf of the

respondents that the respondents have already been paid gratuity

admissible under the CCS (Pension) Rules to them.

5 The dispute raised in these petitions appears to be that under

Rule 50 (1)(a) of the CCS (Pension) Rules, there is a maximum

ceiling of 16-½ times whereas there is no such ceiling under the Payment of Gratuity Act, 1972. However, both under the CCS

(Pension) Rules as well as in the Payment of Gratuity Act, the

maximum amount of gratuity payable to a retired employee is

Rs.3.5 lacs. In the present case, the respondents before they were

absorbed in the service of the MTNL w.e.f. 01.11.1998, they were

admittedly the employees of the Central Government. None of the

respondents in these three petitions had completed five years of

service in the MTNL at the time of their retirement from the MTNL.

Section 4(1) of the Payment of Gratuity Act, 1972 provides that

gratuity shall be payable to an employee to whom provisions of the

Payment of Gratuity Act are applicable after he has rendered

continues service of not less than five years. Since in the present

case, none of the respondents had rendered five years service with

the MTNL at the time of their retirement, they even otherwise were

not entitled to get gratuity under the Payment of Gratuity Act from

the MTNL. However, the gratuity has been paid to the respondents

for the entire period of service rendered by them with the Central

Government or with the MTNL as admissible to them under the CCS

(Pension) Rules and thereby no prejudice can be said to have been

caused to the said respondents. Even if the respondents had

continued in the service of Central Government, they were entitled to get gratuity only under the CCS (Pension) Rules and not under

the provisions of the Payment of Gratuity Act, 1972. It further

fortifies my conclusion that no prejudice is caused to the

respondents by payment of gratuity to them under the CCS

(Pension) Rules. In the opinion of this Court, the judgment of

Hon'ble Supreme Court in MCD Vs. Dharam Prakash Sharma &

Anr. VII (1998) SLT 118 was not correctly applied either by the

Controlling Authority or by the Appellate Authority under the

Payment of Gratuity Act, 1972. In the case of Dharam Prakash

Sharma (supra), the Court was not seized with a matter where the

Central Government employee was absorbed in the service of Public

Sector Undertaking. The Court was also not seized with a case

where an option was given to the employee upon such absorption to

retain the pensionary benefits available under the Central

Government Rules or to go by the service rules of Public Sector

Undertaking. Mr. Agnani, learned counsel appearing on behalf of the

petitioner has submitted that pension is not payable to the

employees of the petitioner as it is payable to the Central

Government employees including the respondents herein.

6 Taking all the above facts and circumstances in consideration,

I have no hesitation in holding that authorities below were wrong in holding that the respondents were entitled to get gratuity under

provisions of the Payment of Gratuity Act, 1972. This Court is of the

considered view that gratuity has been rightly paid to the

respondents under the CCS (Pension) Rules and for that reason, the

impugned orders of the authorities below cannot stand the test of

judicial scrutiny and are, therefore, set aside. The amount deposited

by the petitioner pursuant to the order of the Controlling Authority

be returned to the petitioner forthwith.

7 In view of the above, these writ petitions are allowed and stand

disposed of accordingly. The parties are left to bear their own costs.

August 27, 2008                                    S.N.AGGARWAL
'a'                                                   [JUDGE]
 *           IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                Date of Decision : August 27, 2008

+     WP(C) No.145/2005

#     MAHANAGAR TELEPHONE NIGAM LTD.                      ...    Petitioner

!                                  Mr. Dinesh Agnani, Advocate
                       Versus

$     SH. RAM KUMAR GUPTA & ANR.                    ...      Respondents.

^                                  Mr. Mata Din, Advocate.


CORAM :
HON'BLE MR. JUSTICE S.N. AGGARWAL

1. Whether reporters of Local paper may be allowed to see the judgment?

2. To be referred to the reporter or not?

3. Whether the judgment should be reported in the Digest?

S.N. Aggarwal, J. (Oral)

For orders, see file of WP(C) No. 128/2005.

August 27, 2008                                       S.N.AGGARWAL
'a'                                                      [JUDGE]
 *           IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                Date of Decision : August 27, 2008

+     WP(C) No.20097/2004

#     MAHANAGAR TELEPHONE NIGAM LTD.
                                                            ...   Petitioner

!                                  Mr. Dinesh Agnani, Advocate
                       Versus

$     SH. MATA DIN & ANR.
                                                      ...     Respondents.

^                                  Respondent No. 1 for himself and
                                   also for respondent No. 2.


CORAM :
HON'BLE MR. JUSTICE S.N. AGGARWAL

1. Whether reporters of Local paper may be allowed to see the judgment?

2. To be referred to the reporter or not?

3. Whether the judgment should be reported in the Digest?

S.N. Aggarwal, J. (Oral)

For orders, see file of WP(C) No. 128/2005.

August 27, 2008                                      S.N.AGGARWAL
'a'                                                     [JUDGE]