Madhya Pradesh High Court
Managing Director Madhya Pradesh Rajya ... vs Shri P.N.Pandey on 21 March, 2025
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK JAIN
ON THE 21st OF MARCH, 2025
WRIT PETITION No. 9008 of 2025
MANAGING DIRECTOR MADHYA PRADESH RAJYA SAHKARI BANK MARYADIT
Versus
SHRI P.N.PANDEY AND OTHERS.
&
WRIT PETITION No. 9476 of 2025
MANAGING DIRECTOR MADHYA PRADESH RAJYA SAHAKARI BANK
MARYADIT
Versus
SHRI M.I. KURESHI AND OTHERS
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Appearance:
Shri Kapil Duggal- Advocate for the petitioner.
Shri Anil Lala- Advocate for the respondents in W.P. No. 9008/2025.
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(O R D E R)
Learned counsel for petitioner at the outset admits that though the petitioner is having
alternative remedy of appeal under Section 7 of the Payment of Gratuity Act-1972 but since
a pure legal issue is involved, this petition be entertained in terms of order dated 18.03.2025
passed by coordinate Bench of this Court in W.P. No. 8082/2025 whereby such petition has
been held to be maintainable. This position is not disputed by learned counsel for the
respondents. Therefore, the petition is held maintainable and is heard on merits.
2. Both the petitions involved identical issues and revolved on identical facts, hence they
are being decided by this common order. For the sake of convenience the facts of W.P. No.
9008/2025 are taken up.
3. The petitioner Managing Director MP State Cooperative Bank has called into question
the order dated 14.10.2024 (Annexure P-3) passed by the Controlling Authority under
Payment of Gratuity Act-1972 thereby allowing the claim of the respondent employee to
difference of gratuity amounting to Rs 3,90,880/- which includes principal amount of
gratuity to the tune of Rs. 3,00,677/- and interest thereon from the date of submission of
application before the Controlling Authority which is in the year-2021.
4. The learned counsel for the petitioner Bank submits that the Controlling Authority
ought not to have entertained the application of the respondent for payment of gratuity and
raises two grounds. First ground raised is that the application was filed in the year 2021
which was hopelessly barred by limitation because the respondent stood retired on
31.08.2001 and there was no cause for filing such an application 20 years after his
retirement. The second ground raised is that as per amendment in Staff Service Regulations
(SSR for short), the right to claim higher amount of gratuity is not available to the employees
who are appointed after the cut off date of 28.12.1982 and therefore the respondent employee
had no right to claim remaining amount of gratuity once he had already been paid the amount
of gratuity as per the Bank and the higher amount of gratuity as per better service conditions
would not have been directed to be paid since SSR have been amended from 28.12.1982 and
would not apply to pre 28.12.1982 appointees.
5. The learned counsel for the petitioner has submitted that delay defeats equity and
delay defeats substantive rights too and in support of this contention he has referred to
various judgments of the Hon'ble Supreme Court in the matter of denial of benefits to fence
sitters who have approached the court or judicial authorities after a long lapse of time only
because some other colleague of them has got a benefit from a court of law. It is argued that
the Supreme Court has strongly criticized and deprecated in practice of fence sitters rushing
to the court after one of the employee gets a favourable order and in those cases delay is
fatal. The learned counsel for petitioner has also relied on judgment passed by the High
Court of Madras in the case of C. Ravi Shankar vs The Management (W.A. No. 1572 of
2022) to submit that a provision of limitation engrafted in the State Rules can be looked into
to deny the claim of gratuity on the ground of limitation though the limitation may not be
there in the substantive payment of Gratuity Act-1972. The learned counsel also relies on
order passed by coordinate Benches of this Court in W.P. No. 9912 of 2023 ( Narayan
Prasad Tiwari Vs. State of MP) so also in MP. No. 3085/2021 (General Manager Union
Bank of India Vs. D.D. Mukherjee). The learned counsel for the petitioner has relied on
the provisions of rule 7(5) of payment of Gratuity M.P. Rules- 1973 to submit that there is a
limitation of 30 days from the date gratuity becomes payable to a retired employee and the
claims beyond 30 days ought not to have been entertained.
6. Per contra learned counsel for respondent employee has vehemently opposed the
petition and has submitted that though there was delay in approaching the controlling
authority but the controlling authority has not granted any interest from the date of retirement
as and has awarded interest only from the date of filing of application before the controlling
authority. It is further argued that the right to gratuity gets crystallized as per section 7 (2) of
Payment of Gratuity Act and the said provision does not provide for any limitation and
therefore the limitation as per MP Rules-1973 would not apply and even the M.P. Rules of
1973 do not exactly bar payment of gratuity after expiry of limitation period. It is further
contended that in the claim application filed before the Controlling Authority, the respondent
employee had specifically contended that he was appointed in the petitioner Bank on
05.02.1965 and the petitioner did not object or dispute the position in specific terms and did
not come out with any plea that he was appointed on which date if it was later to 28.12.1982
which is the cut off date for applicability of SSR. It is further contended that so far as
pendency of review petition i,e,R.P.484 of 2024, the basic order is in W.P. No. 3459 of 2021
as confirmed by Division Bench in W.A. No. 621 of 2024 against which no review has been
filed and he said orders have attained finality. The review petition No. 484 of 2024 has been
filed on the ground that employees therein were appointed after the cut off date of
28.12.1982 and therefore not covered under SSR and are distinguishable from WP No.
3459/2021. In view of this argument the review petition of the employer has been
entertained.
7. Heard.
8. The first issue regarding applicability of SSR is taken up. It is not in dispute that in
W.P. No. 3459 of 2021 and W.A. No. 620 of 2024 the said issue has been conclusively
decided by this court and even during the course of arguments the learned counsel for the
petitioner Bank has only contended orally that the petitioner was appointed after the cut off
date 28.12.1982. However in the reply filed before the controlling authority the petitioner
Bank has not come out with any specific averment regarding the date of the appointment of
the respondent/employees with the Bank if it disputes the date claimed by the respondent-
employee. The petitioner Bank is the custodian of the service record of the employees. It
could have come up with the specific stand that the respondent employee was appointed on
any specific date, later to 28.12.1982 which it had chosen not to do and even in the present
petition nothing has been placed on record that the respondent employee was appointed on a
specific date after 28.12.1982.
9. In W.A. No. 620/2024 wherein the division Bench of this Court had the occasion to
conclusively decide the right of the employee to better gratuity under SSR-32, the following
has been held therein:-
"8. Thus, from the aforesaid, it is apparently clear that the rights which have been crystallized in
favour of the employees cannot be taken away by a subsequent amendment. Counsel appearing for
the appellant could not distinguished the proposition as well as the judgment passed by the
Hon'ble Supreme Court in the case of Punjab State Cooperative Agricultural Development Bank
Limited (supra). The writ court has rightly assessed all the aspects of the matter and dismissed the
writ petition. No interference is called for in a well reasoned order passed by the learned writ
court."
10. Therefore, the applicability of the SSR-32 to petitioner to claim better gratuity stands
crystallized as these issue has been conclusively settled and put to rest by Division Bench of
this W.A. No. 620/2024.
11. The second issue was vehemently argued by learned counsel for the petitioner in the
matter of limitation to claim gratuity. Section 7(2) of Payment of Gratuity Act-1972 is the
substantive provision is as under:-
""7(2) As soon as gratuity become payable, the employer shall, whether an application
referred to in sub-section (1) has been made or not, determine the amount of gratuity and
give notice in writing to the person to whom the gratuity is payable and also to the controlling
authority specifying the amount of gratuity so determined.""
12. As per Section 7(2) it is mandatory for the employer that as soon as gratuity becomes
payable the employer shall, whether application has been made or not, to determine the
amount of gratuity and give notice to the person to whom gratuity is payable and also to the
controlling authority specifying the amount of gratuity so determined.
13. It is further provided in Section 7(3) that employer shall arrange to pay the amount of
gratuity within 30 days from the date it becomes payable to the person to whom gratuity is
payable. As per Section 7(3-A) it is further provided that employer is liable to pay interest on
the gratuity, if he does not make the payment within the aforesaid period of 30 days.
14. The above scheme of Section 7 clearly shows that Payment of Gratuity Act is not
dependent on claim of the employee, but it the duty of the employer himself to pay the
gratuity and in default of payment he has to pay interest after expiry of 30 days.
15. It is further provided in Section 4(a) that in case of dispute as to admissibility of claim
to gratuity, the employer shall deposit the amount of gratuity with the Controlling Authority
of the quantum, which the employer admits.
16. The provision of limitation/ time limit has been inferred from Payment of Gratuity Act
Madhya Pradesh Rules 1973 and pari-materia provisions of Payment of Gratuity Central
Rules-1972. The relevant provisions of Central Rules are as under:-
"7. Application for gratuity.--
(1) An employee who is eligible for payment of gratuity under the Act,
or any person authorised, in writing, to act on his behalf, shall apply,
ordinarily within thirty days from the date the gratuity became payable,
in Form 'I' to the employer: Provided that where the date of
superannuation or retirement of an employee is known, the employee
may apply to the employer before thirty days of the date of
superannuation or retirement.
(2) A nominee of an employee who is eligible for payment of
gratuity under the second proviso to sub-section (1) of section 4 shall
apply, ordinarily within thirty days from the date of gratuity became
payable to him, in Form 'J' to the employer:
Provided that an application in plain paper with relevant particulars
shall also be accepted. The employer may obtain such other particulars
as may be deemed necessary by him.
(3) A legal heir of an employee who is eligible for payment of gratuity
under the second proviso to sub-section (1) of section 4 shall apply,
ordinarily within one year from the date of gratuity became payable to
him, in Form 'K' to the employer.
(4) Where gratuity becomes payable under the Act before the
commencement of these rules, the periods of limitation specified in sub-
rules (1), (2) and (3) shall be deemed to be operative from the date of
such commencement.
(5) An application for payment of gratuity filed after the expiry of the
periods specified in this rule shall also be entertained by the employer,
if the applicant adduces sufficient cause for the delay in preferring his
claim, and no claim for gratuity under the Act shall be invalid merely
because the claimant failed to present his application within the
specified period. Any dispute in this regard shall be referred to the
controlling authority for his decision.
(6) An application under this rule shall be presented to the employer
either by personal service or by registered post acknowledgement due.
(Emphasis supplied
The similar provision is there in Madhya Pradesh Rules also, that reads
as under :-
7. Application for gratuity. -
(1) An employee who is eligible for payment of gratuity under the Act,
or any person authorised, in writing, to act on his behalf, shall apply
ordinarily within thirty days from the date the gratuity became payable,
in Form I to the employer :
Provided that where the date of superannuation or retirement of an
employee is known, the employee may apply to the employer before
thirty days of the date of superannuation or retirement.
(2) A nominee of an employee who is eligible for payment of gratuity
under the second proviso to sub-section (1) of Section 4 shall apply
ordinarily within thirty days from the date gratuity became payable to
him, in Form 'J' to the employer :
Provided that an application in plain paper with relevant particulars
shall also be accepted. The employer may obtain such other particulars
as may be deemed necessary by him.
(3) A legal heir of an employee who is eligible for payment of gratuity
under the second proviso to sub-section (1) of Section 4 shall apply,
ordinarily within one year from the date of gratuity became payable to
him, in Form 'K' to the employer.
(4) Where gratuity becomes payable under the Act, before the
commencement of these rules, the period of limitation specified in sub-
rules (1), (2) and (3) shall be deemed to be operative from the date of
such commencement.
(5) An application for payment of gratuity filed after the expiry of the
periods specified in this rule shall also be entertained by the employer,
if the applicant adduces sufficient cause for the delay in preferring his
claim, and no claim for gratuity under the Act, shall be invalid merely
because the claimant failed to present his application within the
specified period. Any dispute in this regard shall be referred to the
controlling authority of the area for his decision.
(6) An application under this rule shall be presented to the employer
either by personal service or by registered post acknowledgement due.
(Emphasis supplied)"
17. The aforesaid issue of applicability of limitation has already been dealt with by this
Court by the coordinate branch of this Court in detail in the case of MP Madhya Kshetra
Vidyut Vitran Company Limited versus D.D. Singh reported in 2014(3) MPLJ 641 and
by taking note of all the legal provisions in the matter of payment of gratuity, a coordinate
bench of this Court dealt with the aspect of applicability of limitation as per the Rules of
1973 and held that since in terms of Rule 7(5), it has been provided that no claim for gratuity
under the act shall be invalid only because the claimant failed to present his application
within the specified period, the claims for gratuity cannot be dismissed on the ground of
limitation. The coordinate Bench held as under:-
"12. So far the question of delay in approaching the Authority is concerned, the Rule 7 of
Payment of Gratuity (M.P.) Rules, 1973 prescribes the method of submission of application.
Rule 7(5) provides that no claim for gratuity under the Act shall be invalid merely because the
claimant failed to present his application within specified period."
18. The aforesaid judgment has been affirmed in appeal also by the Division Bench in
W.A. No. 213/2014.
19. This is settled in law that amount of retiral dues, including gratuity, are not bounties. It
is deferred payment to the employee for the long services rendered by him to the
Department. This payment is made to the employees in December of their life with a view to
provide them a security. They can use this amount for their own settlement, discharge of
social obligations etc. The retiral dues are also recognized as property under the Article 300-
A of the Constitution. A person can be deprived from the property only in accordance with
law made in this regard. In Bhaskar Ramchandra Joshi v. State of M.P., reported in 2013
(4) MPLJ 35, this Court has considered this aspect and opined as under:--
"10. The Apex Court on different occasions had considered the scope
and ambit of property. In Madhav Rao Scindia v. Union of India, (1971)
1 SCC 85 : AIR 1971 SC 530 opined that Prievy Purse payable to ex-
rulers is property. In Nagraj, K. v. State of A.P., AIR 1985 SC 553,
Apex Court opined that right of person to his livelihood is property
which is subject to rules of retirement. In State of
Kerala v. Padmanabhan, (1985) 1 SCC 429 : AIR 1985 SC 356 the
Apex Court opined that right of pension is property under the
Government service Rules, In Madhav Rao Scindia v. State of
M.P., AIR 1961 SC 298 and State of M.P. v. Ranojirao, AIR 1968 SC
1053, the Apex Court opined that property in the context of Article 300-
A includes 'money', salary which has accrued pension, and cash grants
annually payable by the Government; pension due under Government
Service Rules; a right to bonus and other sums due to employees under
statute. This view was also taken in (1971) 2 SCC 330 : AIR 1971 SC
1409, Deokinandan v. State of Bihar. Bombay High Court in the case
reported in (2012) 3 Mah. L.J. 126, Shapoor M. Mehra v. Allahabad
Bank opined that retiral benefits including pension and gratuity
constitute a valuable right in property. In Deokinandan (supra) Apex
Court opined as under :-
"(i) The right of the petitioner to receive pension is property under
Article 31(1) and by a mere executive order the State had no powers to
withhold the same. Similarly, the said claim is also property under
Article 19(1)(f) and it is not saved by sub-article (5) of Article 19.
Therefore, it follows that the order denying the petitioner right to
receive pension affects the fundamental right of the petitioner under
Article 19(1)(f) and 31(1) of the Constitution and as such the writ
petition under Article 32 is maintainable.
11. In the light of aforesaid legal position, it is crystal clear that right to
get the aforesaid benefits is constitutional right. Gratuity or retiral dues
can be withheld or reduced only as per provision made under M.P. Civil
Services (Pension) Rules, 1976. In the present case, there is no material
on record to show that respondents have taken any action in invoking
the said rules to stop or withhold gratuity or other dues."
20. The Apex Court in the case of State of Jharkhand v. Jitendra Kumar Shrivastava,
reported in 2013 AIR SCW 4749 opined as under:--
"14. Article 300A of the Constitution of India reads as under: -
"300A. Persons not to be deprived of property save by authority of law-
No person shall be deprived of this property save by authority of law."
Once we proceed on that premise, the answer to the question posed by
us in the beginning of this judgment becomes too obvious. A person
cannot be deprived of this pension without the authority of law, which
is the Constitutional mandate enshrined in Article 300A of the
Constitution. It follows that attempt of the appellant to take away a part
of pension or gratuity or even leave encashment without any statutory
provision and under the umbrage of administrative instruction cannot be
countenanced".
21. No other enabling provision is brought to the notice of this Court which permits the
employer to deprive the employee from the right of gratuity, only on the ground of delay. In
absence of any enabling provision, in my view, employees cannot be deprived from their
right of gratuity which is flowing from Article 300-A of the Constitution. Thus, ground of
delay is of no help to the petitioners. Thus, the ground of delay taken by the petitioner is
totally contrary to the provisions of the Act and the Rules.
22. So far as reliance placed on Judgment of Madras High Court is concerned, the same is
only having pursuasive value and since the judgment of this Court in the case of D.D. Singh
(supra) has been confirmed by Division Bench in writ appeal it will have binding effect over
this Bench. So far as the judgment of Coordinate Benches of this Court in M.P. No.
3085/2021 and W.P. No. 9912/2023 is concerned, both the said judgments have not taken
into consideration the earlier judgment of coordinate Bench of this Court in D.D. Singh
(Supra). It is settled in law that once the later judgment of co-equal strength does not take
into account the earlier view of co-equal strength, then the earlier view has to prevail. Even
otherwise the judgment in the case of D.D. Singh (supra) has been confirmed in the writ
appeal by a Division Bench and for this reason too, it would have binding effect over this
Bench.
23. So far as the arguments raised with regard to the respondent employee being fence
sitter, is concerned, that provision to be read along with the mandatory provisions of Section
7(2) of Payment of Gratuity Act which casts duty on the employer to pay gratuity
irrespective of application to be filed by the employee. Once Section 7(2) of Payment of
Gratuity Act casts duty on the employer to pay gratuity even without an application being
filed by the employee, there would be no question of claim of employee being defeated on
the ground of delay. All these aspects have been taken into consideration by the coordinate
Bench in the case of D.D. Singh (supra) as confirmed by the Division Bench in W.A. No.
213/2014.
24. Consequently, no reasons are made out to entertain both the writ petitions and
interfere in the order of the Controlling Authority. The same being devoid of merits, stand
dismissed.
(VIVEK JAIN)
JUDGE
MISHRA
