Page No.# 1/8 vs The State Of Assam And 5 Ors
2025 Latest Caselaw 8580 Gua

Gauhati High Court

Page No.# 1/8 vs The State Of Assam And 5 Ors on 17 November, 2025

                                                                     Page No.# 1/8

GAHC010189272021




                                                             2025:GAU-AS:15499

                       THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                            Case No. : WP(C)/5996/2021

         PRADIP SARMA AND ANR.
         S/O LATE LAKSHMI KANTA SARMA, H.NO. 4, LP. SCHOOL, P.O.
         JAPORIGOG, DIST. KAMRUP (M), P.S. DISPUR, GUWAHATI 781005

         2: BRAHMA NANDA ROY

          S/O LATE TIKEN CHANDRA ROY
          VILL. SIALMARI
          DHOPLAPARA
          DIST. CHIRANG
          P.O.
          P.S. BIJNI
          PIN 78339

         VERSUS

         THE STATE OF ASSAM AND 5 ORS.
         DEPTT. OF PUBLIC ENTERPRISE, THROUGH THE COMMISSIONER AND
         SECY. OF PUBLIC ENTERPRISE, DISPUR.

         2:THE COMMISSIONER AND SECY. TO THE GOVT. OF ASSAM

          DEPTT. OF FINANCE
          DISPUR
          GUWAHATI 06

         3:ASSAM STATE FINANCIAL CORPORATION

          VITTYA BHAVAN
          M.D. SHAH ROAD
          PALTAN BAZAR
          GUWAHATI 781008
          ASSAM.
                                                                          Page No.# 2/8

            4:MANAGING DIRECTOR

             ASSAM FINANCIAL CORPORATION
             VITTYA BHAVAN
             M.D. SHAH ROAD
             PALTAN BAZAR
             GUWAHATI 781008
             ASSAM.

            5:THE TRUSTEE

             ASSAM STATE FINANCIAL CORPORATION
             GROUP GRATUITY ACCUMULATION FUND
             VITTYA BHAVAN
             M.D. SHAH ROAD
             PALTAN BAZAR
             GUWAHATI 781008
             ASSAM.

            6:LIFE INSURANCE CORPORATION OF INDIA

             GUWAHATI
             GUWAHATI
             DIVISIONAL OFFICE
             JEEVAN PRAKASH
             FANCY BAZAR
             GUWAHATI 78100

Advocate for the Petitioner   : MR. B SARMAH, MR I Y ALI,MR I UDDIN

Advocate for the Respondent : GA, ASSAM, MR. G K PARAJULI,MR. A L MONDAL (R-6),SC,
LIC,SC, AFC,SC, FINANCE




             Linked Case : WP(C)/1371/2023

            HEM CHANDRA SARMA
            S/O- LATE NABIN CH. SARMA

            RESIDENT OF KAILASH NAGAR

            BYE LANE NO. 1
            TEZPUR
                                                    Page No.# 3/8

P.O.- SOUTH HAZARAPAR

DIST.- SONITPUR
ASSAM

PIN- 784001.


VERSUS

THE STATE OF ASSAM AND 5 ORS
DEPARTMENT OF PUBLIC ENTERPRISE

THROUGH THE COMMISSIONER AND SECRETARY OF PUBLIC ENTERPRISE
DISPUR.

2:THE COMMISSIONER AND SECRETARY TO THE GOVERNMENT OF ASSAM
 DEPARTMENT OF FINANCE
DISPUR
 GUWAHATI-06.

3:ASSAM STATE FINANCIAL CORPORATION
VITTYA BHAWAN
M.D. SHAH ROAD

PALTAN BAZAR
 GUWAHATI- 781008
ASSAM.

4:MANAGING DIRECTOR
ASSAM FINANCIAL CORPORATION
VITTYA BHAVAN
M.D. SHAH ROAD

PALTAN BAZAR
 GUWAHATI- 781008

ASSAM.

5:THE TRUSTEE
ASSAM STATE FINANCIAL CORPORATION
GROUP GRATUITY ACCUMULATION FUND

VITTYA BHAVAN
M.S. SHAH ROAD

PALTAN BAZAR
 GUWAHATI- 781008
                                                                        Page No.# 4/8


          ASSAM.

          6:LIFE INSURANCE CORPORATION OF INDIA
          GUWAHATI
          GUWAHATI
          DIVISIONAL OFFICE

          JEEVAN PRAKASH
           FANCY BAZAR

          GUWAHATI- 781001.
          ------------
          Advocate for : MR B SARMAH
          Advocate for : GA
          ASSAM appearing for THE STATE OF ASSAM AND 5 ORS




                             BEFORE
                 HONOURABLE MR. JUSTICE KARDAK ETE

                                    ORDER

Date : 17-11-2025

Heard Mr. B. Sarmah, learned counsel for the petitioners. Also heard Mr. D. Borah, learned Government Advocate for State respondent Nos. 1 & 2; Mr. R. K. D. Choudhury, learned Standing Counsel, Assam Financial Corporation for respondent Nos. 3, 4 & 5; and Mr. A. L. Mandal, learned counsel for the respondent No. 6.

3. By filing these writ petitions, the petitioners have prayed for a direction to the respondent Assam Financial Corporation to enhanced gratuity amount in parity with the State Government in terms of the Payment of Gratuity Act, 1972 and the Rules framed thereunder.

4. Since both these writ petitions involve similar issue on facts and law, same are taken up analogously and disposed of by this common order.

Page No.# 5/8

5. The petitioners were employees of the Assam Financial Corporation and have retired on various dates from their services. The grievance is that although the State Government has enhanced the ceiling of gratuity amount to Rs. 15 Lakhs with effect from the year 2017, the Assam Financial Corporation has not adopted or implemented the said enhancement. On their retirement, the petitioners were granted gratuity of Rs. 7 Lakhs in terms of the Office Order dated 25.07.2012 (hereinafter referred to as 'Office Order of 2012'). It is the contention of the petitioners that the ceiling for payment of gratuity was earlier fixed at Rs. 3.50 Lakhs under the Assam Financial Corporation (Amendment) Staff Regulations, 2007 (hereinafter referred to as 'Regulation of 2007'), which was subsequently revised to Rs. 7 Lakhs in terms of Office Order of 2012. In the year 2017, the State Government further enhanced the gratuity ceiling to Rs. 15 Lakhs; however, the said enhancement has not been extended to the employees of the Assam Financial Corporation.

6. Mr. B. Sarmah, learned counsel for the petitioners, while referring to the judgment passed by the Hon'ble Supreme Court in The Assam Financial Corporation Limited & Ors. Vs. Bhabendra Nath Sarma & Ors., arising out of SLP (C) No. 19581 of 2023, submits that the Hon'ble Supreme Court has held that the import of Regulation 107 of Regulations of 2007 is such that the higher limit for gratuity set by the State Government shall apply to the Assam Financial Corporation and thereby directed the respondents to calculate the gratuity and pay the same to the similarly situated retired employees of the Assam Financial Corporation. Therefore, he submits that the respondent Assam Financial Corporation may be directed to calculate the gratuity with the corresponding enhancement's made by the Government of Assam under ROP- 2017, thereby extend the enhanced gratuity amount of Rs. 15 Lakhs to the Page No.# 6/8

petitioners by providing the similar relief in terms of the above judgment.

7. Mr. R. K. D. Choudhury, learned Standing Counsel, Assam Financial Corporation, fairly submits that the judgment relied on by the learned counsel for the petitioner in the case of Bhabendra Nath Sarma (supra) covers the case of the present petitioners inasmuch as although the applicability of the payment of Gratuity Act, 1972 has not been decided by the Hon'ble Supreme Court, the entitlement of enhance gratuity under ROP-2017, which has been adopted by the Assam Financial Corporation, would be applicable to the petitioners herein.

8. Having considered the submissions of learned counsel for the parties, particularly the fair submissions made by the learned Standing Counsel, Assam Financial Corporation and on perusal of the judgment rendered by the Hon'ble Supreme Court in the case of Bhabendra Nath Sarma & Ors. (supra), I am of the considered view that the said judgment would squarely covers the case of the petitioners as the Assam Financial Corporation has already decided to adopt the enhanced ceiling for payment of gratuity at par with the State Government, i.e. Rs. 15 Lakhs. Thus, the petitioners are entitled to be paid the enhanced gratuity of Rs. 15 Lakhs by the Assam Financial Corporation.

9. The relevant paragraphs of the judgment of the Hon'ble Supreme Court in the case of Bhabendra Nath Sarma & Ors. (supra) are reproduced herein below:

"17) It has been urged before us that even though Regulation 107 of the 2007 Regulations mentions the ceiling for gratuity notified by the State Government, the said enhanced ceiling does not automatically apply to the AFC. However, the fact situation of the present case cannot be lost sight of. Admittedly, the ceiling for payment of gratuity as per the 2007 Regulations was fixed at Rs. 3.5 Lakhs, which was enhanced to Rs. 7 Lakhs in terms of the 2012 Office Order. Thereafter, the AFC took no initiative to bring parity in the ceiling for payment of gratuity while the Government of Assam kept enhancing the said limit in terms of Page No.# 7/8

the Payment of Gratuity Act, 1972 and it was enhanced to Rs. 15 Lakhs in 2017 itself.

18) Additionally, it goes without saying that Regulation 107 of the 2007 Regulations states '...

maximum of Rs.3.50 lacs or as notified by the Govt. of Assam from time to time...'. In such a case, the inescapable conclusion is that the maximum limit for payment of gratuity has to be Rs. 3.5 Lakhs (later enhanced to Rs. 7 Lakhs) or the limit prescribed by the State Government and in case where the limit prescribed by the State Government is higher than the limit set by the AFC, the import of Regulation 107 has to be interpreted in such a manner that the benefit of the higher limit set by the State Government has to be given to the employees of the AFC.

19) Apart from the above reasoning, we have also taken into consideration equitable treatment of the Respondent - employees. It goes without saying that the AFC chose not to bring about parity in ceiling for payment of gratuity prescribed within its regulations and the ceiling set by the State Government. It has been informed that now the AFC has decided to increase the ceiling for payment of gratuity at par with the State Government, but since these Respondents retired in the interregnum when the limit was Rs. 7 Lakhs, they are not entitled to a higher ceiling. In this fact situation, it would be absolutely inequitable treatment for the Respondents to suffer at the behest of the AFC's lethargy. In any case, we have found above that the import of Regulation 107 of the 2007 Regulations is such that the higher limit for gratuity set by the State Government shall apply to the AFC.

20) Both the Learned Single Judge and the Division Bench of the High Court seem to have been impressed upon the submission of the Respondents that the Respondents are 'employees' within the meaning of Section 4 of the Payment of Gratuity Act, 1972 and that therefore, the ceiling for gratuity under the said Act must apply, particularly in view of the non- obstante clause as contained in Section 14 of the said Act. However, even though arguments have been pressed challenging the said findings, we are, at present, not expressing any opinion regarding the same. We say so, because when the regulations themselves (particularly Regulation 107) import the higher ceiling for payment of gratuity as accepted by the State Government under the Payment of Gratuity Act, 1972, the right of the Respondents flows from the said regulation and the question as to whether the Payment of Gratuity Act itself applies to the AFC or not may be considered in an appropriate case.

21) In view of the foregoing, we agree with the conclusion, by our separate reasons, as reached by the Learned Single Judge and the Division Bench of the High Court and dispose of the present appeal. As per above discussion, the gratuity be calculated and paid within six months from today as directed.

22) The appeal stands disposed of accordingly. Pending application(s), if any, shall also stand disposed of."

10. In view of the above, writ petitions are disposed of with a direction to the respondent Assam Financial Corporation to calculate the gratuity payable to the petitioners in terms of the enhanced ceiling under the State Government's ROP- 2017 and to release the same to the petitioners within a period of 6 (six) Page No.# 8/8

months from today, as the petitioners are similarly situated retired employees of the Assam Financial Corporation with that of the petitioners in the case of Bhabendra Nath Sarma & Ors. (supra).

11. Writ petitions are accordingly stands allowed and disposed of.

JUDGE

Comparing Assistant