A.C. Aggarwal vs Allahabad Bank
2011 Latest Caselaw 5481 Del

            *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                   Date of decision: 15th November, 2011
+                             W.P.(C) 2261/2002
         A.C. AGGARWAL                                     ..... Petitioner
                     Through:          MR. Arun Birbal, Adv.

                                  Versus
    ALLAHABAD BANK                          ..... Respondent
                 Through: Mr. Rajesh Gautam Adv.
CORAM :-
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
                                  JUDGMENT

RAJIV SAHAI ENDLAW, J.

1. The petition impugns the communication dated 24 th November,

2001 of the respondent Bank directing the petitioner to inter alia refund

the entire gratuity amount received by him as a pre-condition for release of

pension to him. The petition also seeks mandamus to the respondent Bank

to release the arrears of pensionary benefits with effect from the date from

which the petitioner stood retired i.e. 30 th April, 2001 along with interest

@ 24% per annum and to continue to pay pension to the petitioner.

2. Notice of the petition was issued. The petition was thereafter

directed to be listed before the Division Bench owing to pendency of LPA

585/2000 then stated to be pending before the Division Bench and

entailing the same issue. Rule DB was issued on 21st July, 2004. Pleadings

have been completed and counsels have been heard.

3. Undisputed facts are, that the petitioner joined the employment of

the respondent Bank as a Clerk w.e.f. 1961; the respondent Bank,

established in the year 1865 had granted pensionary benefits to its

employees since the year 1890; with effect from 2nd March, 1912 the

benefit of Contributory Provident Fund (CPF) was also extended to the

employees of the respondent Bank; the employees of the respondent Bank

thus at the time when the petitioner joined the employment were enjoying

the twin benefits of pension and CPF. The petitioner on 30 th April, 2001

was relieved from the service of the respondent Bank, having availed of

voluntary retirement and was in September/October, 2001 paid gratuity of

`3.5 lacs and the proceeds of the CPF were also released to him. The

petitioner claims that he was also entitled to pension but which was not

released and the respondent Bank ultimately vide letter dated 24 th

November, 2001 impugned in this petition asked the petitioner to inter alia

refund the amount received by him towards gratuity as a pre-condition for

release of pension. The petitioner contends that he is entitled to pension in

addition to gratuity and without being required to refund the gratuity

amount received.

4. The respondent Bank contends that the petitioner is not entitled to

both, gratuity and pension.

5. The counsel for the petitioner has today urged that the matter is no

longer res integra, having been decided vide judgment of the Apex Court

in Allahabad Bank v. All India Allahabad Bank Retired Employees

Association (2010) 2 SCC 44 and awaiting which judgment the hearing in

the present petition was adjourned from time to time, as is also borne out

from the order sheet.

6. The claim, of the retired employees of the Bank in the judgment

aforesaid, was for gratuity under the Payment of Gratuity Act, 1972. The

stand of the respondent Bank in the said matter was, that under the Pension

Scheme of the Bank the employees of the Bank were to exercise the option

either for pension or for gratuity and the dual benefit was not available

under the Scheme; since the retired employees in that case had exercised

the option of availing the pension and were receiving the pension since

their retirement, they were not entitled to gratuity. The Supreme Court in

the judgment aforesaid noticed that the respondent Bank had not succeeded

in its attempt to get itself exempted from the provisions of the Gratuity Act

and held that there is no escape from payment of gratuity under the

provisions of the Gratuity Act, unless the establishment is granted

exemption by the appropriate Government from operation of the provisions

of the Act. It was further held that pensionary benefits may include

payment of pension as well as gratuity and one does not exclude the other;

only in cases where the gratuity or pensionary benefits under and existing

scheme are better in comparison to what an employee may get under the

Payment of Gratuity Act, the Government may grant an exemption and

relieve the employer from the statutory obligation of payment of gratuity.

It was yet further held that no establishment can decide for itself that its

employees were in receipt of gratuity or pensionary benefits not less

favourable than the benefits conferred under the Gratuity Act. It was yet

further held that the employees having exercised the option under the

Pension Scheme for availing benefits of pension instead of gratuity were

not estopped from claiming gratuity under the Gratuity Act in as much as

there could be no estoppel against the statute. Accordingly the retired

employees were held entitled to payment of gratuity.

7. The counsel for the petitioner further contends and it is confirmed

by the counsel for the respondent Bank also that the gratuity of `3.5 lacs

paid to the petitioner was under the Gratuity Act and not under the scheme

of the respondent Bank. The counsel for the petitioner further informs that

the petitioner has w.e.f. 2009 availed of the option then given by the

respondent Bank and has w.e.f. 2010 availed of pension by refunding to

the respondent Bank the respondent Bank's share of CPF. He thus states

that the dispute which survives is only of arrears of pension between the

years 2001 and 2009 and which is squarely covered by the judgment

aforesaid of the Supreme Court.

8. Per contra, the counsel for the respondent Bank has contended that

the judgment of the Supreme Court was concerned with the claim for

gratuity and not the claim for pension as in the present case and is thus not

applicable. He further invites attention to para 46 of the judgment aforesaid

whereby the judgment was expressly made applicable to only such of the

employees who retired from the service of the respondent Bank between 1 st

January, 1986 and 31 st October, 1992. It is stated that though it was

subsequently vide order dated 29th January, 2010 clarified that "such of

those officers of the bank working prior to 1 st July, 1979 and have retired

after coming into force of the said Act on 31 st October, 1993 shall alone be

entitled for the benefits" (and in which the petitioner herein would be

covered) but the order was intended to convey that the employees who

have retired till 31 st October, 1993 only would be entitled to the benefit of

the judgment. The same is sought to be demonstrated from the application

seeking the clarification.

9. Though the counsel for the respondent Bank at one stage also sought

to contend that the respondent Bank at no stage has had occasion to rebut

whether the gratuity paid to the petitioner was under the Scheme or under

the Gratuity Act and in response whereto the counsel for the petitioner

attempted to show that the gratuity under the Scheme would have been of

approximately `10 lacs and gratuity of `3.5 lacs was paid to the petitioner

in accordance with the Act and to which the counsel for the respondent

Bank rejoined by contending that he was not sure whether the gratuity

under the Scheme would have been higher than the gratuity under the Act

but subsequently admitted that the gratuity of `3.5 lacs paid by the

respondent Bank was under the Act only.

10. In the aforesaid scenario, we fail to see as to how the matter would

not be covered by the judgment aforesaid of the Supreme Court the ratio

whereof is that benefit of gratuity under the Gratuity Act cannot be

deprived without obtaining exemption from the Government and which has

not been granted to the respondent Bank. It was precisely for this reason

that the Supreme Court upheld the claim of the retired employees in that

case for gratuity in addition to the pension being received by them. Though

the Supreme Court limited the judgment aforesaid to the employees of the

Bank working prior to 1st July, 1979 and who had retired after coming into

force of the said Act on 31st October, 1993 and in which the petitioner as

aforesaid is covered but even if we were to consider the case of the

petitioner as not covered by the said dates, the counsel for the respondent

Bank is unable to show as to how the ratio aforesaid of the judgment

would not apply to the petitioner. The petitioner is admitted to be entitled

to pension under the Old Pension Scheme of the year 1890 of the

respondent Bank. The said pension is sought to be denied to the petitioner

only for the reason of the gratuity under the Gratuity Act having been paid

to the petitioner but which gratuity the Supreme Court has held to be a

statutory right not affected by the pension. We have also put it to the

counsel for the respondent Bank as to whether the petitioner would not

have been in the same position as the retired employees before the

Supreme Court had he not been paid gratuity and had started availing of

the pension and would have thereafter claimed the gratuity. No reply to the

said proposition has been forthcoming.

11. The petition is accordingly allowed and the Rule made absolute. The

communication dated 24th November, 2001 of the respondent Bank asking

the petitioner to refund the gratuity amount received by him as a pre-

condition or to furnish an undertaking in that regard as a pre-condition for

release of pensionary benefits is quashed/set aside. The petitioner is held

entitled to pension in addition to the gratuity amount received by him. The

respondent Bank is accordingly directed to release the arrears of pension

due to the petitioner within six weeks of today together with interest @6%

per annum from the date when the pension for each month would have

fallen due and till the date of payment. The said rate of interest has been

granted having regard to the fact that the issue was pending adjudication

before the Supreme Court and has been adjudicated recently only. For the

same reason, we also refrain from awarding any cost against the

respondent Bank.

RAJIV SAHAI ENDLAW,J

ACTING CHIEF JUSTICE

NOVEMBER 15, 2011 pp..