Rajasthan Marudhara Gamin Bank vs The Appellate Authority Under ...
2022 Latest Caselaw 1775 Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Spl. Appl. Writ No. 577/2020

Rajasthan Marudhara Gamin Bank, Through Its Chairman, Head Office Tulsi Tower, 9th B Road, Sardarpura, Jodhpur.

----Appellant Versus

1. The Appellate Authority Under Payment Of Gratuity Act 1972, And The Deputy Chief Labour Commissioner (Central), Ajmer (Raj.)

2. Controlling Authority Under Payment Of Gratuity Act, 1972, And Assistant Labour Commissioner (Central), Ajmer (Raj.).

3. Shri Kana Ram Chouhan S/o Shri Bhoma Ram Chouhan, Through The General Secretary, Gramin Bank Pensioners Samity, Pali.

----Respondents Connected with D.B. Spl. Appl. Writ No. 588/2020

Rajasthan Marudhara Gramin Bank, Through Its Chairman, Head Office Tusli Tower, 9Th B Road, Sardarpura, Jodhpur.

----Appellant Versus

1. The Appellate Authority Under Payment Of Gratuity Act, 1972 And The Deputy Chief Labour Commissioner (Central), Ajmer (Raj.)

2. Controlling Authority Under Payment Of Gratuity Act, 1972, And Assistant Labour Commissioner (Central), Ajmer (Raj.)

3. Shri Anda Ram Singharia S/o Shri Kunna Ram Singharia, Through The General Secretary, Gramin Bank Pensioners Samity, Pali

----Respondents D.B. Spl. Appl. Writ No. 599/2020

Rajasthan Marudhara Gramin Bank, Through Its Chairman, Head Office Tulsi Tower, 9Th B Road, Sardarpura, Jodhpur.

                                                                   ----Appellant



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                               Versus

1. The Appellate Authority Under Payment Of Gratuity Act, 1972, And The Deputy Chief Labour Commissioner (Central), Ajmer (Raj.)

2. Controlling Authority Under Payment Of Gratuity Act, 1972, And Assistant Labour Commissioner (Central), Ajmer (Raj.).

3. Shri Ashok Kumar Katara S/o Shri Ram Dayal, R/o 21, Kan Nagar, Sector-8, Jiran Magri, Udaipur (Raj.).

----Respondents D.B. Spl. Appl. Writ No. 604/2020

Rajasthan Marudhara Gramin Bank, Through Its Chairman, Head Office Tulsi Tower, 9Th B Road, Sardarpura, Jodhpur.

----Appellant Versus

1. The Appellate Authority Under Payment Of Gratuity Act, 1972, And The Deputy Chief Labour Commissioner (Central), Ajmer (Raj.)

2. Controlling Authority Under Payment Of Gratuity Act, 1972, And Assistant Labour Commissioner (Central), Ajmer (Raj.).

3. Shri Pema Ram Choudhary S/o Shri Pukha Ram Choudhary, Through The General Secretary, Gramin Bank Pensioners Samity, Pali.

----Respondents D.B. Spl. Appl. Writ No. 679/2020

Rajasthan Marudhara Gramin Bank, Through Its Chairman, Head Office Tulsi Power, 9Th B Road, Sardarpura, Jodhpur

----Appellant Versus

1. The Appellate Authority Under Payment Of Gratuity Act, 1972, And The Deputy Chief Labour Commissioner (Central), Ajmer (Raj.)

2. Controlling Authority Under Payment Of Gratuity Act, 1972, And Assistant Labour Commissioner (Central), Ajmer (Raj.).

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3. Shri Sunil Kumar Loyal S/o Shri H. M. Loyal, Through General Secretary, Gramin Bank Pensioners Samity, 248, Jay Nagar, Ramdev Road, Pali (Raj.).

----Respondents D.B. Spl. Appl. Writ No. 320/2021

Rajasthan Marudhara Gramin Bank, Through Its Chairman, Head Office Tulsi Tower, 9Th B Road, Sardarpura, Jodhpur.

----Appellant Versus

1. The Appellate Authority Under Payment Of Gratuity Act, 1972 And The Deputy Chief Labour Commissioner (Central), Ajmer (Raj.)

2. Controlling Authority Under Payment Of Gratuity Act, 1972 And Assistant Labour Commissioner (Central), Ajmer (Raj.)

3. Shri Harun Khan Chhipa S/o Shri Usman Khan Chhipa, Through The General Secretary, Gramin Bank Pensioners Samity, Pali.

----Respondents D.B. Spl. Appl. Writ No. 420/2021

Rajasthan Marudhara Gramin Bank, Through Its Chairman, Head Office, Tulsi Tower, 9Th B Road, Sardarpura, Jodhpur, Rajasthan 342003.

----Appellant Versus Kishan Singh Khiriya, R/o 14, Govind Nagar, Sector-13, Hiran Magri, Udaipur (Raj.) 313002.

----Respondent

For Appellant(s), : Mr. Bhavit Sharma through V.C.

For Respondent(s),         :    Mr. Satya Prakash Sharma,
through V.C.                    Mr. Mukesh Rajpurohit, ASG





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HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE MADAN GOPAL VYAS

Order

04/02/2022

Applications for dispensing with filing of certified copy of

the impugned judgment:

Since the certified copy of the impugned common judgment

is in the main matter, production of such certified copy in these

appeals is dispensed with.

The applications are disposed of.

Special Appeals (Writ):

These appeals arising out of a common background.

Learned counsel for the appellant-Bank pointed out that the

controversy is covered by the Division Bench judgment dated

05.01.2022 in the case of Rajasthan Marudhara Gramin Bank

Jodhpur vs. The Appellate Authority Under Payment Of

Gratuity Act, 1972 and others (D.B. Special Appeal (Writ)

No.561/2020, decided on 05.01.2022). We notice that the

said judgment the Division Bench had held and observed as

under:

"23. It can thus be seen that there is a clear divide between the judicial opinions across the country. We would have due regard to the different view points, analysis and interpretations adopted by different Courts in the process of taking our own view in the matter. A brief comparison of the computation provisions under the Act of 1972 and the regulations would show that under the Act of 1972, the gratuity is payable at the rate of 15 days of wages for every completed year of service or part thereof in excess of six months. This however comes with the ceiling, as may be provided by the Central Government from time to time, which at the relevant time was Rs.10 lacs. As against this, in terms of Regulation 72(3), the gratuity would be payable at the rate of one month pay for every

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completed year of service or part thereof in excess of six months. This would be subject to maximum of 15 months' pay. As per the proviso, for every completed year of service beyond 30 years, an additional amount at the rate of one half of month's pay would be paid.

Significantly, there is no upper limit of gratuity that my be paid under Regulation 72.

24. The fact that despite framing of the said Regulations by the Bank, if the employee tends to receive higher gratuity under the Act of 1972, the same must be paid is beyond dispute. As noted, as per Sub- section (5) of Section 4 of the Act of 1972, nothing in the said Section would effect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. Section 14 of the Act as noted gives overriding effect to the Act over other enactments. Even Regulation 72(1) provids that an officer or employee shall be eligible for payment of gratuity either as per the provisions of the Act of 1972 or as per Sub-regulation (2) whichever is higher. Thus, it is beyond doubt that an employee must receive gratuity whichever is more beneficial either under the Act of 1972 or under the Regulations framed by the bank. However, this is not the same thing as to suggest that an employee can choose computation of gratuity under one statute and seek benefits of other provisions under another statute. As we have noticed, the scheme of gratuity under the Act of 1972 and under the regulations framed by the bank are different. For example, the Act of 1972 prescribes the ceiling beyond which the gratuity would not be paid irrespective of the computation. There is no such ceiling prescribed under the regulations. However, the regulations have other inherent limitations in computation of gratuity such as the gratuity computation would not exceed 15 months' salary upto 30 years of service, after which an additional benefit of half month's salary would be added to the payable gratuity. The employee, therefore, can claim gratuity either under the Act of 1972 or under the regulations framed by the bank, but cannot claim the benefit under both the statutes. Though, reference to no authorities is needed for this purpose, as correctly pointed out by the counsel for the bank, this has been held by the Supreme Court in clear terms in the case of Beed District Central Cooperative Bank Ltd. vs. State of Maharashtra [(2006) 8 SCC 514].

25. This discussion was necessary because one of the main arguments of the counsel for the officers is that the term 'wages' as defined under the Act of 1972 should be applied while computing the gratuity payable to the employees concerned. The definition of term "wages" under this Act includes dearness allowance. If the employees chose to receive gratuity under the Act of 1972 being more beneficial, we would have no

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hesitation in accepting this contention. However, when it comes to payment of gratuity, their desire is that the ceiling as has been prescribed by the Central Government should not be applied and for such purpose they would resort to the regulations framed by the bank and in particular regulation 72 in which as noted there is no ceiling prescribed for payment of gratuity. In our view, this would be wholly impermissible. An employee can either receive gratuity as calculated under the Act of 1972 and in which case he must submit to the maximum payment of Rs.10 lacs or can claim the benefit under the regulations and in which case the computation shall have to be made as provided therein.

26. Despite this conclusion, if under the said Regulations, the officers are correct in contending that the dearness allowance must be included for the purpose of computation of gratuity, they may still succeed. We may, therefore, come to the interpretation of regulation 72 with the aid of different definitions noted above.

27. Sub-regulation (2) of Regulation 72 provides that every officer or employee shall be eligible for gratuity on retirement, death, disablement or resignation after completion of 10 years of continuous service or termination of service in any other way except by way of punishment but after completion of 10 years of service. Sub-regulation (3) is of considerable importance and provides that the amount of gratuity payable to an officer or an employee shall be one month's pay for every completed year of service or part thereof in excess of six months subject to a maximum 15 months' pay. First proviso to Sub-regulation (3) provides that where an officer or an employee has completed more than 30 years of service, he would be eligible to gratuity for an additional amount at the rate of half of a month's pay for each completed year of service beyond 30 years. Further proviso is of great importance and provides that in respect of an officer the gratuity is payable based on the last pay drawn. In the third proviso to the said regulation, it is provided that in respect of an employee pay for the purpose of calculation of gratuity would be the average basic pay, dearness allowance and special allowance and officiating allowance payable during the 12 months preceding death, disability, retirement, resignation or termination of service.

28. The regulation 72, thus, at every stage makes a clear distinction between an officer and an employee for computation of gratuity. Sub-regulation (3) makes entirely different provisions for both classes of persons. When it comes to officers the gratuity is payable on the basis of last pay drawn. In comparison in case of an employee, the gratuity would be calculated on the basis of average basic pay, dearness allowance, special

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allowance and officiating allowance payable during 12 months preceding death, disablement, retirement etc.

29. With this distinction in mind, we may refer to the definitions of the relevant terms. As noted, the term 'employee' is defined in regulation 2(j) as to mean an employee of the Bank as classified under Clause (b) and (c) of regulation 3(1). The term 'officer' has been defined in regulation 2(l) as to mean an officer of bank as classified under Clause (a) of sub-regulation (1) of regulation 3. Thus, the regulations also make a clear distinction between the officers and employees.

30. The term 'pay' is defined as the basic pay drawn per month by officer or employee in the pay scale including stagnation increments and any part of the emoluments which may specifically be classified as pay under the regulations. The term 'salary' means aggregate of pay and dearness allowance. The term 'emoluments' means the aggregate of salary and allowances. These terms, thus, are specifically defined and carry different meanings. The term 'pay' is different from salary and dearness allowance is excluded for the purpose of the meaning of the term 'pay'. This is clear from the very definition of term 'pay' which does not refer to dearness allowance and becomes further clear from the fact that the term 'salary' is defined as to mean aggregate of pay and dearness allowance.

31. The further proviso to sub-regulation (3) of regulation 72 when refers to the computation of gratuity for an officer to be based on last pay drawn, it necessarily excludes the dearness component. This is clear from the interpretation and interplay of the terms 'pay', 'salary' and 'emoluments' noted above and it is further clear when we compare the computation provision for gratuity payable to an employee as contained in the third proviso to the said sub- regulation. As noted, as per this proviso when it comes to an employee (in contrast to an officer) the gratuity would be calculated on the basis of average basic pay including dearness allowance and special allowance and officiating allowance payable during 12 months preceding death, disability, retirement, resignation or termination of service. These regulations leave no manner of doubt that when it comes to computation of gratuity payable to an officer of the bank, the dearness allowance would not form part of the pay. Any other view would be doing violance to the plain language used in the statute. With respect, we are therefore unable to accept the view point expressed by the Madhya Pradesh High Court. Though, the decisions of the High Court were carried in appeal before the Supreme Court, mere dismissal of the SLP would not form a precedent which would bind the other High Courts.

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32. Before closing, we may record that the learned Single Judge in the impugned judgment had referred to a communication dated 12.08.2016 from Baroda Rajasthan Kshetriya Gramin Bank. It appears that the copy of the said communication was placed before the Court by the respondents. Contents of the communication are reproduced in the judgment which states that as per the clarification issued by the NABARD the bank had decided to include the dearness allowance component for the purpose of computation of gratuity payable to officers also. The learned Single Judge was of the opinion that the said bank being the other Gramin Bank operating in the State, the said clarification had considerable relevance and the petitioner-Bank could not have discriminated the respondents for the purpose of payment of gratuity.

33. In our opinion, this aspect has many pitfalls. To begin with, this communication was placed before the learned Single without full fledged pleadings and attendant documents. The original clarification allegedly issued by the NABARD does not seem to have been placed on record. Under what circumstances the Baroda Rajasthan Kshetriya Gramin Bank had taken a decision to include dearness allowance is not clear. Further, the counsel for the appellant-bank has today placed before us a communication dated 10.04.2018 from the NABARD to the Baroda U.P. Gramin Bank in which the stand taken by the NABARD is entirely different. It is stated that the decision of the Baroda U.P. Gramin Bank to include dearness allowance for the purpose of calculation of gratuity for the officers is not in order and against their own service Regulations of 2010. A copy of this communication is taken on record. The communication relied upon by the learned Single Judge was an internal communication of the Bank and did not contain any clarification from NABARD. On the contrary, as noted, the stand of the NABARD which is emerging from the above noted communication dated 10.04.2018 is totally different. We are not basing our conclusions on any of these documents. We are conscious that even this communication dated 10.04.2018 and documents issued by the NABARD have not been fully examined. We have referred to this communication only for the purpose of indicating that our conclusions would be based on the rules, regulations and statutes applicable and not on the basis of the stand taken by the Baroda Gramin Bank. There Isi yet another aspect of the matter. We have referred to the provisions of the Act concerning constitution of the Board of Directors of a gramin bank. Board of directors would include nominees of NABARD, sponsor bank and the government of India. Unless the Board of Directors of the present bank had taken a decision to include dearness allowance component for computation of last

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pay drawn, the same cannot be forced upon it, which in any case is opposed to the Regulations framed by the bank.

34. Since we have held the central issue in favour of the Bank, it is not necessary to go into the question of delay at the hands of the officers in approaching the competent authority, which was ignored without filing the applications for condonation. We may, however, briefly observe that the Appellate Authority and the learned Single Judge were correct in reversing the decision of the Competent Authority in relation to its interpretation on additional benefit payable to a retiring officer having more than 30 years of service. Such benefit as per the correct interpretation of the regulation would be additional amount calculated at the rate of one half month's pay for every completed year of service beyond 30 years. This is quite besides the question whether the officers without filing independent writ petitions challenging the order of the Appellate Authority, could have agitated this issue before the learned Single Judge by raising it in a reply.

35. In the result, all the appeals are allowed. Resultantly, the judgment of the learned Single Judge and the orders passed by the Controlling Authority as well as the Appellate Authority are set aside. If the bank has deposited any amount before this court or the Authorities under the Act of 1972 pursuant to the impugned orders and judgment, the same shall be returned to the bank."

In the result, the appeals are allowed. The judgment of the

learned Single Judge is reversed.

(MADAN GOPAL VYAS),J (AKIL KURESHI),CJ

98to104-MohitTak/-

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