Gujarat High Court

Bipin Mafatlal Patel vs Gujarat Cancer And Research Institute on 10 September, 2024

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                                   IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                     R/SPECIAL CIVIL APPLICATION NO. 1946 of 2023

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                                                BIPIN MAFATLAL PATEL
                                                        Versus
                                       GUJARAT CANCER AND RESEARCH INSTITUTE
                      ================================================================
                      Appearance:
                      MR DG SHUKLA(1998) for the Petitioner(s) No. 1
                      MR HARSHEEL D SHUKLA(6158) for the Petitioner(s) No. 1
                      MR SUDHIR NANAVATI, SENIOR ADVOCATE WITH MR VANDAN K
                      BAXI(5863) for the Respondent(s) No. 1
                      NANAVATI & NANAVATI(1933) for the Respondent(s) No. 1
                      ================================================================

                         CORAM:HONOURABLE MR. JUSTICE HEMANT M.
                               PRACHCHHAK

                                                           Date : 10/09/2024

                                                               ORAL ORDER

1. By way of present petition under Article 226 & 227 of the

Constitution of India, the petitioner has prayed for the

following reliefs :

"(A) Your Lordships may be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other writ, order or direction quashing and setting aside the impugned Order dated 12.11.2022 passed by the Appellate Authority under the Payment of Gratuity Act, 1972, Ahmedabad at Annexure-'A' to this petition as being illegal, improper, perverse, unjust, without jurisdiction and without authority in law.

(B) Any other and further reliefs that may be deemed fit and proper in the interest of justice may also kindly be granted."

2. The brief facts giving rise to the present petition are as

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under :

2.1 The petitioner herein was working with The Gujarat

Cancer & Research Institute (M.P.Shah Cancer Hospital)

affiliated with B.J. Medical College, Ahmedabad - Respondent

herein (hereinafter referred to as the 'Respondent Institute' for

the sake of brevity) as Professor and Head of Anesthesia

Department. The Petitioner employee had joined the services

of Respondent Institute on 01.02.1984 and he retired from the

services on attaining the age of superannuation w.e.f.

30.04.2018. The Petitioner Employee was lastly drawing

Rs.1,91,250/- as salary per month which came to be enhanced

after the implementation of 7th Pay Commission benefits. The

Petitioner Employee had continuously served for more than 34

years with the Respondent Institute. The Petitioner Employee

was entitled for Rs.20,00,000/- as Gratuity under the Payment

of Gratuity Act, 1972 but the Respondent Institute paid only

Rs. 10,00,000/- as Gratuity and therefore, he submitted several

representations for getting balance amount of Rs. 10,00,000/-

alongwith 10% interest to the Respondent Institute, however,

the Respondent Institute did not pay the balance amount of

Gratuity amounting to Rs.10,00,000/- alongwith 10% interest.

The Petitioner Employee, therefore, submitted Application for

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getting balance amount of Gratuity alongwith interest in Form-I

under the provisions of the Act and Rules dated 12.08.2021.

The Respondent Institute neither made the payment nor gave

any reply, hence, the Petitioner Employee submitted Form-N

dated 31.08.2021/01.09.2021 to the Controlling Authority

under the Act for getting the balance amount of Gratuity of

Rs.10,00,000/- alongwith 10% simple interest being Gratuity

Application No.357 of 2021. The Respondent Institute

submitted its reply dated 14.09.2021 before the Controlling

Authority and submitted that after the grant was received from

the State of Gujarat for making the payment of arrears of 7 th

Pay Commission benefits, the balance amount of Gratuity

would be paid alongwith other submissions. The Respondent

Institute had further submitted reply dated 25.10.2021,

15.11.2021, 29.11.2021 and 13.12.2021 reiterating that the

balance payment of Gratuity amounting to Rs. 10,00,000/-

would be paid after the grant is received from the State

Government.

2.2 It is the case of the petitioner that the Petitioner

Employee had submitted his reply before the Controlling

Authority dated 11.10.2021 and submitted that the balance

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amount of Gratuity Rs. 10,00,000/- should be paid within 30

days from the date of retirement, however, as the said amount

was not paid within 30 days, the Petitioner Employee was

entitled for 10% interest also w.e.f. 01.05.2018. It was also

submitted that the Petitioner Employee was entitled for

Gratuity on the basis of his last drawn salary Rs.2,00,600/-. The

Controlling Authority vide Order dated 31.01.2022 partly

allowed the Gratuity Application No.357 of 2021 and directed

the Respondent Institute to pay Rs.10,00,000/- as arrears of

Gratuity with 10% simple interest w.e.f. 01.09.2021 till the

payment is made within 30 days of the said order. The

Controlling Authority had held that Petitioner had worked upto

30.04.2018 and on attaining the age of superannuation, he

retired from the services w.e.f. 30.04.2018. However, without

assigning any reasons, the Controlling Authority directed to

pay interest w.e.f. 01.09.2021. The said Order was forwarded

on 03.02.2022 by the Controlling Authority. The Petitioner

Employee was paid the arrears of Gratuity amounting to

Rs.10,00,000/- alongwith Rs.50,685/- towards 10% interest

from 01.09.2021 till the date of payment of arrears of Gratuity

i.e. till 04.03.2022. The Petitioner Employee was paid arrears

of Gratuity alongwith 10% interest w.e.f. 01.09.2021 totally

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amounting to Rs.10,50,685/- on 04.03.2022. However, the

Petitioner was not paid 10% simple interest on arrears of

Gratuity - Rs. 10,00,000/- for the period from 01.05.2018 to

31.08.2021.

2.3 It is the case of the petitioner that the Petitioner

Employee being aggrieved by and feeling dissatisfied with the

Order dated 31.01.2022 in Gratuity Application No.357 of 2021

passed by the Controlling Authority preferred an Appeal before

the Appellate Authority under the Payment of Gratuity Act,

1972 being Appeal No.47 of 2022 dated 16.03.2022 for

claiming 10% simple interest from 01.05.2018 to 31.08.2021

on Rs.10,00,000/- being the arrears of Gratuity. Thereafter, the

Respondent Institute submitted its Reply dated 05.05.2022

before the Appellate Authority and submitted that the

Respondent Institute has paid Rs.10,00,000/- as arrears of

Gratuity and Rs.50,658/- as interest from the date of

applications i.e. 01.09.2021 to 04.03.2022 and no further

amount was payable by the Respondent Institute. The

Respondent Institute denied the claim of the Petitioner

Employee and prayed to dismiss the Appeal with costs. The

advocate of Petitioner Employee had submitted Written

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Arguments dated 05.05.2022 and submitted that in view of

settled legal position and the Judgments of this Court as well

as other High Courts the Employer is legally bound to pay

Gratuity within 30 days from the date of cessation of

Employer- Employee relationship. The advocate of Petitioner

Employee had also cited various Judgments in support of the

claim of the Petitioner Employee, however, the Appellate

Authority had not dealt with the said Judgments and did not

grant interest w.e.f. 01.05.2018 even though the Petitioner

Employee had retired from the services on attaining the age of

superannuation w.e.f. 30.04.2018. The advocates of both the

parties thereafter submitted their arguments and the matter

was placed for passing necessary order. The Appellate

Authority vide impugned Order dated 12.11.2022 rejected the

Appeal filed by the Petitioner Employee and upheld the Order

passed by the Controlling Authority in Gratuity Application

No.357 of 2021.

2.4 Being aggrieved by and feeling dissatisfied with the said

impugned Order dated 12.11.2022 passed by Appellate

Authority, Ahmedabad, the present Petition is filed by the

petitioner Employee under Article 226 & 227 of the constitution

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of India read with the provisions of Payment of Gratuity Act,

1972 with the aforesaid prayers.

3. Heard learned advocate Mr.D.G. Shukla, appearing on

behalf of the petitioner workman and learned senior advocate

Mr.Sudhir Nanavati assisted by learned advocate Mr.Vandan

Baxi, appearing on behalf of the respondent Institute.

4. Learned advocate Mr.Shukla has submitted that the

impugned orders passed by the Appellate Authority as well as

the Controlling authority are erroneous, illegal and unjust and

the same are required to be quashed and set aside. He has

submitted that the petitioner superannuated on 28.02.2018

but, he was relieved from the services on 30.04.2018 and by

way of amendment in Section 4(3) of the Act, 1972 w.e.f.

29/03/2018, the amount of gratuity was increased from Rs.10

Lakhs to Rs.20 Lakhs and since before the date of his relieving

the office, the said amendment has came into force, the

petitioner is entitled to get the benefits of the said amendment

and the said enhanced amount of Rs.10 Lakhs was paid to the

petitioner on 31/01/2022 and therefore, the petitioner is

entitled to get interest on the delayed payment of that Rs.10

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Lakhs which was enhanced by way of amendment w.e.f.

29/03/2018. He has further submitted that without considering

this aspect, the Controlling Authority has considered the

incorrect date and passed the impugned order dated

31/01/2022 and even the Appellate Authority has also not

considered this fact and also not considered the submissions of

the petitioner and ignoring the well settled legal position has

passed the impugned order rejecting the appeal preferred by

the petitioner and upholding the order dated 31/01/2021

passed by the Controlling Authority without any cogent and

convincing reasons and therefore, the petitioner is entitled to

get the amount of @ 10% interest from 01.05.2018 till the

actual date of payment of the additional amount and therefore,

both the authorities have not considered this aspect in its true

and proper spirit and in consonance with the provisions of the

Payment of Gratuity Act, 1972 more particularly, Section 4(3)

read with Section 7(3) and thereby both the authorities have

committed a serious error.

4.1 Learned advocate Mr.Shukla has submitted that the

petitioner was actually relieved from the service on 30/04/2018

though his actual date of retirement was 28/02/2018 and he

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had worked till 30/04/2018 and for that he is entitled to get all

the benefits including the payment of gratuity also and

therefore, considering this fact, the Controlling Authority has

rightly passed the order for entitlement but, at the same time,

the Controlling Authority has considered an incorrect date and

therefore, the petitioner has raised the dispute with regard to

the date on which the case was considered for the entitlement

which is infact without applying mind and the same was upheld

by the Appellate Authority and rejected the appeal. He has

further submitted that the Appellate Authority has committed

gross error by rejecting the appeal without assigning any

reasons or findings as to why the 10% interest as demanded

by the petitioner on the delayed payment is not payable for

the period from 30/04/2018 till the actual date of payment,

however, the Appellate Authority has mechanically rejected

the appeal without application of mind and therefore, learned

advocate Mr.Shukla has urged that the impugned orders

passed by the Controlling Authority as well as the Appellate

Authority are perverse, illegal, improper and unjust and the

same are required to be quashed and set aside and the

present petition is required to be allowed.








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                      4.2      In    support        of     his     submissions,         learned        advocate

Mr.Shukla has referred and relied upon the decisions of the

Hon'ble Apex Court in case of Devraj Shyamrao Deshmukh

v. Ahmedabad Municipal Transport Service, reported in

[2017] 1 CLR 735, in case of R.M. Engineering Works v.

Khushalbhai Manilal Chavda, reported in [2013] 2 CLR

436 and in case of Trilochan Singh S/o Late Shri Kesar

Singh, Srinagar (Raj.) v. Shri Gurunanak Khalsa School

& College, Srinagar (Raj.), reported in [2017] 2 CLR

1055. He has therefore, submitted that as per the decisions of

the Hon'ble Apex Court, the Hon'ble Apex Court has

considered the date on which the person concerned is made to

retire and not the date on which the actual payment is to be

made and therefore, herein the present case, the petitioner is

entitled for the benefits from the date he is actually relieved

from the service i.e. from 30/04/2018 and he is entitled to get

interest @ 10% for late payment.

5. Per contra, learned senior advocate Mr.Sudhir Nanavati,

appearing on behalf of the respondent Institute, has submitted

that there is no dispute with regard to the date of retirement

and entitlement of retiral dues, the respondent Institute has

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immediately paid all the retiral dues to the present petitioner

including the payment of gratuity at the time of retirement. He

has submitted that so far the payment which is subsequently

made in addition to the earlier payment of gratuity i.e. Rs.10

Laksh is concerned, that addition of increased limit came into

force only on 29/03/2018 i.e. subsequent to the date of

retirement of the present petitioner. He has further submitted

that the petitioner herein held the post of professor and head

of Anesthesia Department and the petitioner being a professor

was governed by the resolution dated 04/02/2009 by the

Health and Family Welfare Department, whereby, the

Government of Gujarat enhanced the age of retirement for

Medical Officers, teaching and non teaching Administration

personnel working under the Health and Family Welfare

Department from 58 years to 62 years. He has further

submitted that as per the said resolution dated 04/02/2009,

the date of superannuation of the petitioner was to be

28/02/2018 (i.e. the date on which the petitioner became 62

years old), but as the petitioner was a professor, as per the

Government Resolution 28/06/1994, the retirement date of the

Petitioner will be determined based on the date of the end of

the academic year and thus, the petitioner retired on

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30/04/2018 being the last date of the 2017-2018 academic

year. The G.R. dated 28/06/1994 is reproduced hereunder :

"The teaching staff such as Professors, Associate Professors, Assistant Professors, Tutors and Deans (Principals) etc. serving in the Government Medical and Dental Colleges under the Commissioner of Health, Medical Services and Medical Education and performing academic work in accordance with the existing policies and rules of the respective universities get retired at the age of 58 years, the age of superannuation prescribed under the existing rules of the State Government. Thus, due to their retirement during the middle of a term as per the prescribed age of superannuation, it takes time to make appointments on the posts falling vacant due to their retirement, which affects the academic work of the students. The said matter was under consideration of the Government. After careful consideration, it is hereby resolved that the academic staff of the Government Medical and Dental Colleges under the Commissioner of Health, Medical Services and Medical Education shall be continued in service from the date after their retirement till the end of a term of the respective academic year subject to the following conditions.

(1) Teaching staff engaged in the academic work shall be continued in service after their retirement till the end of the respective term, but the service rendered till the end of the term after the prescribed retirement age shall not be counted for any benefit pertaining to increment, pension and retirement, but the other facilities to which they are entitled shall continue.

(2) End of an academic term shall be considered as 31 October or 30 April of the respective year.

(3) This benefit will not be available to non-teaching staff.

(4) These orders shall come into effect immediately.

These orders are issued in concurrence with the Finance Department vide its note dated 14/06/1994 and the General Administration Department vide its note dated 14/06/1994 on even numbered file of this department.

By order and in the name of the Governor of Gujarat,

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Sd/- (illegible) (Sushil K. Trivedi) Under Secretary, Health and Family Welfare Deaprtment, Govenrment of Gujarat.

5.1 Learned senior advocate Mr.Nanavati has submitted that

even the additional amount of Rs.10 Lakhs as increased by the

amendment published in the Gazette of India on 29/03/2018

and the effective date for this addition in the original amount

of gratuity by virtue of amendment in Section 4(3) of the Act,

1972 according to which, the retirement date of the petitioner

is 28/02/2018 but, because of the Circular / G.R. issued by the

State Government on 28/06/1994 particularly for Health and

Family Welfare Department, wherein, they have considered the

age of all the employees working in the cadre of Professor,

Assistant Professor, Reader, Tutor and Dean (Principal) who are

in service in Health Department / Medical and Dental, in case

of those employees, the age of retirement is 62 years but, if

the retirement date comes between the academic term i.e.

from March to August and then from September to April, then

their actual retirement age is to be considered the end of the

date of the academic term and therefore, in the present case

also, as the date of retirement of the petitioner was

28/02/2018 but, since it was in between the academic term,

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therefore, his retirement date was considered to be

30/04/2018, which is not the actual date of his retirement and

therefore, in fact, the petitioner is not at all entitled for getting

this increased amount of gratuity which was enhanced

subsequently by virtue of amendment in Section 4(3),

whereby, the limit was increased from Rs.10 Lakhs to Rs.20

Lakhs and once the person is not entitled for the enhanced

amount itself, there is no question of entitlement of interest on

the said enhanced amount.

5.2 Learned senior advocate Mr.Nanavati has referred to the

affidavit-in-reply filed on behalf of the respondent Institute and

submitted that in cases where the professor or such other

person holding any post relating to education has to continue

his service post the date of his superannuation till the last date

of completion of the academic year, the period from the date

of superannuation (the day on which the petitioner turned 62)

to the date of actual retirement (the last day of the academic

year) would not be counted towards calculation of the

retirement benefits, thus the retirement date for the purpose

of calculating gratuity payable to the petitioner will be

28/02/2018 instead of the date as claimed by the petitioner i.e.

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30/04/2018. In support of his submissions, learned senior

advocate Mr.Nanavati has referred and relied upon the

decision of this Court rendered in Special Civil Application

No.10095 of 2016 and allied matters decided on 25/07/2016

and the Circular of the Gujarat Government, Health and Family

Welfare Department dated 28/06/1994 appended alongwith

affidavit-in-reply at page 105 and urged that the present

petition be dismissed.

6. I have heard the learned advocates appearing for the

respective parties and perused the material placed on record.

The issue involved in the present petition is that for the

purpose of considering the entitlement of payment of gratuity

as provided under Section 7(3) read with Section 4 that at the

time of retirement, the concerned employee is entitled to get

all his retiral benefits including the payment of gratuity and

now it is well settled by series of judgment of the Hon'ble Apex

Court as well as this Court that on the date of retirement, the

concerned employee is entitled to get the amount of gratuity

and if there is any delay in making payment of gratuity then he

is entitled to get interest as per the provisions of Section 7(3)

(a) of the Act, 1972, which reads as under :

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Section 7(3-A) : If the amount of gratuity payable under sub- section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:

Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.] [ Substituted by Act 22 of 1987, Section 7, for sub-Section (3) (w.e.f. 1.10.1987).]

6.1 This Court has also passed orders in a number of matters

and directed the authority to make payment of interest but,

herein the present case, the dispute is relating to the date of

retirement. As per the service conditions, the actual date of

retirement of the present petitioner is 28/02/2018 but, for the

purpose of following G.R. issued by the State Government

dated 28/06/1994, which is referred hereinabove, his case was

considered till the date of reaching the age of superannuation

in between the academic term which was extended till the end

of the academic term i.e. 30/04/2018, and it was specifically

mentioned in the said G.R. that the period from the date of

superannuation (the date on which the petitioner turned 62) to

the date of actual retirement (the last day of the academic

term) would not be counted towards calculation of the

retirement benefits, and thus, the retirement date for the

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purpose of calculating gratuity payable to the present

petitioner was 28/02/2018, instead of 30/04/2018 as claimed

by the petitioner. The judgments referred and relied upon by

the learned advocate Mr.Shukla, wherein, there was no dispute

with regard to the eligibility criteria for the interest on the

payment due and payable till the actual date of retirement but,

the present case is not similar to those cases, infact, in the

present case, it is based upon the Circular issued by the State

Government way-back in the year 1994 even prior to the date

of appointment of the petitioner and therefore, it is governed

by the said Circular, which is relating to the very department

and the employees who are in the education department.