Smt. Pratima Baidya And Another vs Tripura Khadi And Village ...
2021 Latest Caselaw 37 Tri

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                    HIGH COURT OF TRIPURA
                      _A_G_A_R_T_A_L_A_
                        WP(C) No.393 of 2020
Smt. Pratima Baidya and another
                                                     ..........Petitioner(s)

                                VERSUS

Tripura Khadi and Village Industries Board & Others
                                                     ...........Respondent(s)
For Petitioner(s)        :      Ms. A. Debbarma, Advocate.
For Respondent(s)        :      Mr. J. Choudhury, Advocate.

      HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI
                               ORDER

07/01/2021 Petitioners are retired employees of Tripura Khadi and Village

Industries Board. Petitioner No.1 retired from service on attaining the age

of superannuation w.e.f. 31.01.2020. The petitioner No.2 retired on

31.08.2018. Their case is that the previous ceiling of Rs.10,00,000/- for

payment of gratuity has been applied by the employer. They argue that the

ceiling was revised by virtue of Government notification dated 29.03.2018.

Since they have retired after the said date the revised ceiling of

Rs.20,00,000/- would be applicable in their cases.

They rely on judgment of this Court dated 13th February, 2020 in

case of Sri Bhupati Debnath versus the State of Tripura and others in

WP(C) No.1054 of 2019 in which following observations were made.

"7. This distinction between the State or the Central Government being an appropriate Government in relation to different classes of establishments, manifests itself in various sections contained in the said Act. For example, under Section 3 the appropriate Government may, by notification, appoint an officer to be a Controlling Authority who shall be responsible for the administration of the Act. Different Authorities may be appointed for different areas. Under Section 4A the appropriate Government may notify date with effect from which every employer other than an establishment belonging to or under the control of the Central or the State Government would have to obtain an insurance for liability for payment of gratuity. Under sub-section (1) of Section 5 the appropriate Government may by notification exempt any establishment, factory, mine or oilfield etc. from the operation of the provisions of the Act. Under sub-section (2) of Section 5 similarly the appropriate Government may notify exemption of any employee or class of employees from the operation of the provisions of the said Act.

8. However, when it comes to Section 4 of the said Act which pertains to payment of gratuity, this distinction of the appropriate Government being Central or the State Government, has no effect. Sub-section (1) of Section 4 provides that the gratuity shall be payable to an employee on termination of his employment after he has rendered continuous service for not less than five years, on his superannuation or retirement or resignation or death or disablement due to accident or disease. Sub- section (2) of Section 4 provides that for every completed year of service or part thereof in excess of six months the employer shall pay gratuity to an employee at the rate of 15 (fifteen) days wages based on the rate of wages last drawn by the concerned employee. Sub-section (3) of Section 4 which is of importance reads as under:

"(3) The amount of gratuity payable to an employee shall not exceed such amount as may be notified by the Central Government from time to time."

9. As per this provision thus the amount of gratuity payable to an employee would not exceed such amount as may be notified by the Central Government from time to time. The group of words "such

amount as may be notified by the Central Government from time to time" was substituted by Act 12 of 2018 for the group of words "ten lakh rupees". This limit of ten lakhs of rupees was self in substitution of earlier limits of lesser amounts.

10. It can thus be seen that insofar as the payment of gratuity, its computation and the ceiling up to which such amount can be paid as referred to in Section 4 of the said Act, the term "appropriate Government" has no bearing. This distinction is also apparent from the statement of objects and reasons which provides that for the purpose of uniformity, the Central Act was envisaged. At the same time, appropriate Government is for the purpose of administering the Act. The ceiling limit for payment of gratuity is provided in sub-section (3) of Section 4. Previously, such ceilings were contained in the sub-section itself. Pursuant to amendment by virtue of Act 12 of 2018 the power to prescribe such ceiling has been vested in the Central Government to be exercised by issuing notification in this regard. It is in exercise of such delegated powers of legislation that the Central Government has issued a notification dated 29.03.2018 which reads as under: "S.O. 1420 (E).--In exercise of the powers conferred by sub-section (3) of section 4 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies that the amount of gratuity payable to an employee under the said Act shall not exceed twenty lakh rupees."

11. This revised ceiling thus would apply to all establishments irrespective of whether they are controlled or governed by the State or the Central Government as the appropriate Government. The stand of the respondents, therefore, that unless and until such revised ceiling of payment of gratuity is adopted by the State Government, the employees of the said corporation cannot claim benefit of such revised limit cannot be accepted. Revised ceiling limit of Rs.20,00,000 (rupees twenty lakhs) would be applicable to the petitioner.

12. The corporation cannot cite the reason of financial constraints indefinitely for paying post retiral benefits of its employees. The petitioner has put in more than 29 years of service. His service is not governed by the pension scheme. After his retirement, therefore, he would have only savings in the form of gratuity, provident fund accumulated in his account and leave encashment, if any, to fall back

upon in his old age. Such amount must, therefore, be paid over to him as soon as possible.

13. Under the circumstances, petition is disposed of with following directions: (i) As provided earlier, the petitioner shall apply to the respondent No.2 stating his calculation of payable gratuity. The respondent No.2 shall examine the petitioner's calculation and convey to him if any gratuity remains still payable; (ii) While calculating such gratuity, revised limit of Rs.20,00,000 (rupees twenty lakhs) shall be applicable; (iii) If there is any shortfall in payment of gratuity, the same shall be paid within a period of 4(four) months from today with simple interest @ 7.5% per annum from one month after the date of superannuation till actual payments; Page 10 of 10 (iv) The remaining amount of leave encashment shall be released within a period of 4(four) months from today. The entire leave encashment payment shall carry simple interest @ 7.5% per annum from one month after the date of retirement till actual payments; (v) The gratuity already paid shall also carry simple interest @ 7.5% per annum from one month after the date of retirement till actual payments.

14. Pending application(s), if any, also stands disposed of."

Case of the petitioners stand on the same footing. Under the

circumstances, the respondents shall release the remaining amount of

gratuity of the petitioners by applying the revised limit of Rs.20,00,000/-.

The difference shall be paid with simple interest @ 7.5% per annum after

completion of 1(one) month from the date of retirement till actual payment.

Entire exercise shall be completed within 4(four) months from today. If

there is any delay in payment of the previous gratuity beyond the period of

1(one) month of retirement, the same shall also carry similar interest rate.

With these observations, petition is disposed of. Pending

application(s), if any, also stands disposed of.

(AKIL KURESHI), CJ

Dipesh