M.L. Banga vs The Chief General Manager
2010 Latest Caselaw 1351 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       W.P.(C) No. 8093/2008

%                                   Judgment delivered on: 11.3.2010

M.L. Banga                                              ...... Petitioner.
R/o House No.5J/101,
NIT, Faridabad
HARYANA
                                        Through:Mr.Ranbir             Yadav,
                                        Advocate
                               versus

The Chief General Manager                           .......... Respondent.
                                        Through: Mr. Rajiv Kapoor, Adv.


CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR

1.     Whether the Reporters of local papers may
       be allowed to see the judgment?                                  Yes

2.     To be referred to Reporter or not?                               Yes

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

KAILASH GAMBHIR, J. Oral:
*

1. The short question arises in the present case is as

to that whether the amendment brought under the Payment

of Gratuity Act covers the case of the petitioner to entitle

him to claim the increased amount of gratuity.

2. Counsel for the petitioner submits that the

petitioner was superannuated on 31.10.95 and the said

amendment in the Payment of Gratuity Act enhancing the

limit from Rs.1 lac to Rs.2.50 lacs became effective from

1.4.95. In support of his arguments counsel for the

petitioner has placed reliance on Rule 50 of CCS (Pension)

Rules dealing with the regulations of the amount of pension.

Counsel for the petitioner has also placed reliance on the

judgment of the Punjab & Haryana High Court in Rukmani

Widow of Baru Ram Vs. State of Haryana & Ors.,

2005(106) FLR 294 and the judgment of the Apex Court

in State of Punjab & Ors. Vs. Amar Nath Goyal & Ors.,

(2005) 6 SCC 754. Counsel for the petitioner further

submits that in reply to the RTI, the respondent through its

Senior Officer has taken a stand that the amount of ceiling

of the gratuity was enhanced from Rs. 1 lac to Rs.2.50 lacs

and thereafter the ceiling was raised to Rs. 3.50 lacs. The

contention of the counsel for the petitioner is that the

ordinance dated 24.9.97 became effective from 1.4.95 as

would be evident from Rule 50 of the CCS (Pensions) Rules.

3. Refuting the said submissions of the counsel for

the petitioner, Mr. Rajiv Kapoor counsel for the respondent

submits that the petitioner has already been paid Rs. 1 lac

towards his gratuity, payable under the Payment of Gratuity

Act. Counsel further submits that the ceiling amount of Rs.1

lac was enhanced to Rs. 3.5 lacs through the amending act

of 1998 and the said amendment became effective from

24.9.97. In support of his arguments counsel for the

respondent has placed reliance on the said Amendment

Act 1998, whereby Section 4 of the Gratuity Act was

amended to enhance the limit of Rs. 1 lac to Rs. 3.50 lacs.

Mr. Rajiv Kapoor further submits that in the additional

affidavit filed by the respondent bank, it has been clearly

stated that gratuity to the employees of the bank is payable

under one of the schemes i.e. (i) Payment of Gratuity Act,

1972; (ii) Service gratuity as per DTCS/Award and (iii)

Compassionate Gratuity (Officers). Counsel further submits

that the petitioner is entitled to the gratuity under the

Payment of Gratuity Act 1972 and not under the other two

schemes. Counsel further submits that amendment upon

which the counsel for the petitioner has placed reliance is

not under the Payment of Gratuity Act but the same relates

to retirement gratuity or death gratuity amendment which

was brought through Notification dated 17.3.97 published

as GSR NO. 177 in the Gazette of India dated 5.4.1997.

Counsel thus submits that the said enhancement which the

petitioner is claiming is not applicable to him as the

petitioner was entitled to gratuity under the Payment of

Gratuity Act, which has already been paid to him. Counsel

further submits that so far the information given by the

Officer of the respondent bank is concerned, the same was

due to some inadvertent mistake. It wrongly stated that

under the Payment of Gratuity Act the amount of ceiling was

enhanced from Rs. 1 lac to Rs.2.50 lacs which in fact should

have been from Rs. 1 lac to Rs. 3.50 lacs as per the said

amendment in the Payment of Gratuity Act.

4. I have heard learned counsel for the parties.

5. It is not in dispute that the petitioner is entitled to

amount of gratuity payable under the Payment of Gratuity

Act. Section 4 of the Payment of Gratuity Act was amended

by the Parliament Act 11 of 1998 and through the said

amendment the ceiling of Rs. 1 lac was enhanced to Rs. 3.50

lacs. Perusal of the said amendment also clearly shows that

the said amendment came into force on 24.9.97. It would be

necessary to reproduce the said amendment under Section

4 of the Payment of Gratuity (Amendment ) Act 1998 as

under:

"Amendment of Section 4 of Act 39 of 1972:-In Section 4 of the Payment of Gratuity Act, 1972 (hereinafter referred to as the principal Act), in sub-section(3), for the words "one lakh" the words "three lakhs and fifty thousand" shall be substituted."

6. Reference to this amendment in the Payment of

Gratuity Act has also been made in the judgment of the Apex

Court reported in Shitla Sharan Srivastava & Ors. Vs.

Govt. of India & Ors., (2001) 6 SCC 106. In the said

matter the Apex Court has clearly held that the said Act

was amended in 1998 fixing the ceiling of payment of

Gratuity at Rs. 3.5 lacs effective from 24.9.1997. The Apex

Court also clearly held that the officers of the respondent

bank are governed by the Pension Rules and are paid

gratuity only in terms of the Act while the compassionate

gratuity is a separate scheme to provide succour to the

bereaved families of the officers who die in harness and the

effective date of revision is fixed by the Executive Committee

of the Central Board at Rs. 1 lac w.e.f. 1.1.1986, Rs. 2 .5

lacs w.e.f. 1.4.1995 and Rs. 3.5 lacs with effect from 1.1.96.

Relevant para of the said judgment is reproduced as under:

"6. It is not disputed that the claim made in these petitions is in respect of the employees who retired prior to 24.9.1997. The respondent-Bank has its own service rules/ schemes governing its employees. The 5th Pay Commission recommendations are in relation to the Central Government employees. A mere speech made by the Finance Minister without taking further steps to give the benefit of enhanced ceiling limit of gratuity amount specifically in the case of the respondent-Bank is of no help to the petitioners. The service rules governing employees of RBI/IDBI and Central Government employees are different. The Act was amended in 1998 fixing the ceiling of payment of gratuity at Rs. 3.5 lakhs effective from 24.9.1997. Assuming that the respondent-Bank had made profit, the claims of the petitioners cannot be allowed unless there is a sustainable foundation for such a claim. The respondent-Bank has pointed out that the officers of the Bank are governed by the pension rules and are paid gratuity, only in terms of the Act while the compassionate gratuity is a separate scheme to provide succour to the bereaved families of the officers who die in harness and the

effective date of revision is fixed by the Executive Committee of the Central Board at rs. 1 lakh with effect from 1.1.1986, Rs. 2.5 lakhs with effect from 1.4.1995 and Rs. 3.5 lakhs with effect from 1.1.1996. The compassionate gratuity, as stated above, is different from the gratuity amount payable under the Act. Office memorandum dated 27.10.1997 relied upon by the petitioners categorically provides that those orders apply to Central Government employees governed by CCS (Pension) Rules, 1972. Further, the 5th Pay Commission recommendations are applicable to Central Government employees only and are not made applicable to the employees of the respondent-Bank. Thus looking to the various aspects, we conclude that these petitions are devoid of merit, hence they are dismissed. No order as to costs."

7. The counsel for the petitioner has placed reliance

on Rule 50 of the CCS (Pensions) Rules which deals with

retirement and death gratuity to which the petitioner is not

entitled, therefore, any enhancement made thereof even if

became effective from 1.4.95 would be of no help to the

petitioner. Also the judgments relied upon by the

counsel for the petitioner will not be applicable to the facts

of the present case.

8. Hence, since the petitioner had retired on

31.10.1995, on which date, as per the Payment of Gratuity

Act he was entitled to gratuity for a sum of Rs. 1 lac and

which amount has already been paid to the petitioner,

there is no merit in the present petition.

9. Hence in the light of the above discussion, the

present petition is dismissed.

March 11, 2010                   KAILASH GAMBHIR,J
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