JUDGMENT
Jayant Patel, J.
1. All these petitions, except Special Civil
Application Nos.2786 of 2004 to 2789 of 2004, are yet not
admitted and, therefore, Rule.
Mr.M.D.Pandya, learned Counsel, waives service of
Rule on behalf of the respondent.
In all other matters, Rule has been served and
Mr.M.D.Pandya, learned Counsel appears on behalf of the
Gujarat Electricity Board, and with the consent of the
parties, whole this group is decided with the other
matters, which are being considered today for final
hearing.
2. In all these petitions, the facts are common and
common questions are involved and, therefore, they are
being dealt with by this common order.
3. The short facts appears to be that the
petitioners are the employees, who have retired from 1st
April, 1995 to 23rd September, 1997. There is no dispute
on the point that a settlement was entered into between
the respondent, Gujarat Electricity Board (“the Board”
for short), and its union on 24th July, 1988 and the said
settlement, inter alia, provided for Condition No.24.0
for gratuity, which reads as under:
“The maximum financial ceiling on the amount of
gratuity payable will be revised on State Govt.
lines, which is at present Rs.1 lakh. This will
have effect from 1-10-1987.”
There is also no dispute on the point that after
the settlement, General Standing Order (“the G.S.O.” for
short) came to be issued by the Board on 24th August,
1988 and Condition No.29 of the G.S.O. reads as under:
“29. Gratuity:
The maximum financial ceiling on the amount of
gratuity payable will be revised on State
Government lines, which is at present Rs.one
lakh.”
As per the petitioners, right to receive the
gratuity had accrued on the basis of the settlement and
the G.S.O. may not be of much relevance. It is the
further case of the petitioners that the State
Government, thereafter, has revised the ceiling limit of
the gratuity from time to time i.e. from Rs.1 lakh to
Rs.2.50 lakhs and thereafter, it is further revised to
Rs.3.50 lakhs. It is also the case of the petitioners
that at the time when the matter was considered by the
Honourable Finance Minister of the State Government on
6th March, 1993, it was represented on behalf of the
Board to the State Government that the gratuity is being
paid on the same scale as that of the Central Government.
The petitioners concerned have retired from service. It
is an admitted position that they have been paid the
amount of gratuity by the Board taking as the basis being
the ceiling limit of Rs.1 lakh.
3.1 All the petitioners approached the Controlling
Authority under the Payment of Gratuity Act, 1972
(hereinafter referred to as “the Act” for short) and the
basis of the application was that as per the settlement,
the ceiling limit stands revised as being revised by the
State Government from time to time and when they retired
from service, the ceiling limit prevailing was Rs.3.50
lakhs and the amount of gratuity is not accordingly paid
and, therefore, the application is made to direct the
respondent-Board to make the payment accordingly. It
appears that the Controlling Authority considered
respective applications made by the employee concerned
and found that the revision in the ceiling limit, as
decided by the State Government from time to time, would
not automatically apply and when the employee concerned
retired from service, the ceiling limit prevailing of the
gratuity was Rs.1 lakh and as the payment is already
made, the concerned petitioner employee would not be
entitled for the additional amount of gratuity and,
therefore, all the applications came to be dismissed by
the Controlling Authority.
3.2 All the concerned petitioners have carried the
matter in appeal before the Appellate Authority and the
Appellate Authority has also ultimately concurred with
the reasoning given by the Controlling Authority and has
confirmed the order passed by the Controlling Authority
by dismissing the appeal.
It is under these circumstances that all the
concerned petitioners have approached this Court by
respective petitions.
4. Mr.Pankaj R.Desai, learned Counsel appearing for
the petitioners, at the outset, submitted that the
present petitions are also under Article 226 of the
Constitution of India and, therefore, he submitted that
the petitions may not be treated as the petition under
Article-227 of the Constitution of India.
5. As such, if the prayers made in the petitions are
considered, they are essentially for quashing of the
order passed by the Appellate Authority as well as by the
Controlling Authority and for consequential prayer for
payment of the amount of gratuity, as prayed before the
Controlling Authority, has been made and, therefore, the
petitions can be said as essentially under Article 227 of
the Constitution of India.
However, Mr.Desai for the petitioners made an
attempt to submit that since the writ of certiorari has
been prayed, the petitions can be said as the petitions
under Article 226 of the Constitution of India.
I am afraid such a contention can be accepted because the
petitions are essentially for quashing of the orders
passed by both the lower quasi judicial authorities under
the Act and as such, there is no ground invoking
violation of any fundamental rights of the petitioners
under Article 14 or 16 of the Constitution of India.
6. Leaving aside the aforesaid, even if the matter
is concerned for examining the legality and validity of
the impugned orders passed by both the authorities, for
the reasons recorded hereinafter, it cannot be said that
both the authorities have committed any jurisdictional
error or have exercised the discretion so perversely
which would attract the power of this Court under Article
227 of the Constitution of India. Apart from the above,
even if the action of the Board of making the payment of
the gratuity is examined, for the reasons as stated
hereinafter, it cannot be said that the action for not
paying the amount of gratuity on the basis that the
maximum ceiling limit is Rs.3.50 lakhs is arbitrary or
unreasonable and, therefore, I find that it may not be
necessary for this Court to finally conclude on the point
as to whether the petitions would be falling under the
jurisdiction of Article 226 or 227 as the said aspect
would be of no relevance because even if the matters are
considered under Article 226 of the Constitution of
India, then also, it would make no difference in the
final outcome of all the petitions.
7. On perusal of the orders passed by the
Controlling Authority and the Appellate Authority, it
appears that both the lower authorities have taken a view
in substance that the language used in the settlement is
“will be revised” and is with the language that “at
present, it is Rs.1 lakh”. Normally, when a literal
interpretation of any of the conditions of the settlement
is possible, it will not be required for the Court or any
authority to add the word and to extract the meaning of
the terms of the settlement. In my view, as per the
plain and simple reading of the relevant term of the
settlement, the interpretation, as sought to be canvassed
by Mr.Desai on behalf of the petitioners, cannot be
accepted. The language used is “the maximum financial
ceiling limit on the amount of gratuity payable will be
revised on State Government lines,
which is at present Rs.1 lakh.” Therefore, the words,
“will be revised”, cannot be read or equated giving the
same meaning as the words, “will stand revised”, or “will
be revised from time to time”. Therefore, even if the
G.S.O., which came to be issued on 24th August, 1988 is
not taken as the basis, for considering the right of
gratuity, the only simple, literal and plain construction
of the term of settlement would be that the maximum limit
shall be Rs.1 lakh.
8. This does not mean that there is no power or
authority with the Board to revise the gratuity, as may
be revised by the Government from time to time, but, the
fact remains that it has not been revised subsequently on
account of revision of the ceiling limit by the State
Government. It is also an admitted position that the
petitioners are the employees of the Board, which is a
statutory Board and they are not the employees of the
State Government as it is. It may be that the Board as
an employer may take a decision of adopting the benefits,
which are being given to the Government employees, at the
time when the settlement took place, but, the
interpretation cannot be stretched to the extent that
such benefit shall stand conferred upon the employees, as
prevailing from time to time unless and until there are
express words incorporated therein. This Court, in the
case of the Gujarat State Road Transport Corporation vs.
Chandrakant Tapubhai Vyas, reported at (2004) 5 Gujarat
High Court Judgements 618, while considering the scope
and ambit of the power of the authority under the Act,
has observed at paragraphs 5 and 6 as under:
“5. The first question which is required to
be considered is the scope and ambit of section 4(2) of the act. The said sub-section reads as
under:-
“(2). 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 fifteen
day’s wages based on the rate of wages
last drawn by the employee concerned:
xxx xxxx xxxx xxxx xxx xxx ”
5.1 The language used by the legislature is
the “rate of fifteen day’s wages based on the
rate of wages last drawn by the employee
concerned”. There is no dispute on the point
that on the date when the respondent employees
retired from service, gratuity is not paid to
them on the rate of wages last drawn. On the
date on which the employee concerned retired,
there was no revision of payscale in existence.
Section 7 of the Act provides for the
determination of the amount of gratuity.
Sub-section (3) of section 7 provides that the
employer shall arrange to pay the amount of
gratuity within thirty days from the date it
becomes payable to the person to whom the
gratuity is payable. Sub-section (3-A) provides
that 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, with simple interest at such rate not
exceeding the rate notified by the Central
Government from time to time. Sub-section (4) of
section 7 provides that if there is any dispute
as to the amount of gratuity payable to an
employee under this Act or as to admissibility of
any claim under the Act, the employer shall
deposit with the controlling authority such
amount as he admits to be payable by him as
gratuity. Clause (c) of sub-section 4 of section
7 provides that the controlling authority shall
after due inquiry and after giving the parties to
the dispute a reasonable opportunity of being
heard, determine the matter or matters in dispute
and if, as a result of such inquiry, any amount
is found to be payable to the employee, the
controlling authority shall direct the employer
to pay such amount. Sub-section (7) of section 7
provides for appeal. Therefore, it appears that
if there is non-payment of the amount of
gratuity, then the power is attracted.
Similarly, if there is any dispute on the
question of admissibility of any claim of
gratuity, then also, the power would be
attracted.
6. The employees concerned in the present
case asserted their right for admissibility of
the payment of gratuity upon revision of payscale
whereas the employer-petitioner has denied the
liability on the question of not providing by way
of settlement expressly for payment of gratuity.
As such, on a conjoint reading of sections 4 and
7 it appears that the jurisdiction of the
controlling authority would be attracted only if
there is statutory liability to pay the amount of
gratuity, and there is non-payment by the
employer concerned. Further, even if the power
under section 7 are construed for entertaining
the claim of gratuity in purported exercise of
the right to receive gratuity, then also the
controlling authority, while exercising the
admissibility of the claim will have to decide as
to whether such claim is legally admissible or
not. At the time when such aspect is to be
considered, the authority shall be guided by the
provision of the Act for accrual of liability to
pay the gratuity and for accrual of the right to
receive the amount of gratuity.”
Therefore, in view of the aforesaid decision, it
is for the authority to consider the right to receive
the amount of gratuity at the relevant point of time.
In the very decision, at paragraph 7, it was observed
as under:
“… … As such, in the matter of
revision of payscale, it may have various facets.
No doubt, employees concerned of any institution
may have a right to represent and may have a
right to participate in the deliberations and
discussions and also, to some extent, in the
finalization in the matter of payscale, however,
the decision to revise the payscale is
essentially a policy decision of the employer,
taking into consideration various aspects
including the financial, the cost structure, cost
of living, profit generation, reserves/surplus
and such other aspects. At the time when the
decision is taken for revision of the payscale by
an employer, more particularly in the present
case a Public Corporation, it may include various
packages and it may also include various modes of
making payment. … … …”
Therefore, two aspects appear to be clear. One
is that the settlement was as a package including various
other benefits. So far as the gratuity is concerned,
there was a clause for enhancing the maximum financial
ceiling limit of Rs.1 lakh. Such a decision of Rs.1
lakh, at the relevant point of time, may be on the basis
of the ceiling limit fixed by the State Government, but
thereby, it cannot be said that there will be an
automatic revision of the ceiling limit as and when so
revised by the State Government. The second is that even
otherwise also, when the settlement is entered into
between the Union and the employer, Board, as back as in
the year 1988, of revising the limit of the gratuity and
when such settlement is actually acted upon, it cannot be
said that any action taken by the Board based on the said
settlement would be rendered unreasonable or arbitrary.
9. Keeping the aforesaid aspects in mind, if the
impugned orders passed by both the authorities are
examined, it cannot be said that the Controlling
Authority or the Appellate Authority have committed any
jurisdictional error or have exercised the discretion so
perverse which would call for interference by this Court
in exercise of power under Article 227 of the
Constitution of India. It further transpires that the
interpretation given by both the authorities appears to
be just and reasonable and is, in effect, a correct
interpretation of a particular clause of the settlement
and admissibility or non-admissibility of the amount of
gratuity claimed.
10. Mr.Pankaj R.Desai, learned Counsel for the
petitioners, made an attempt to submit that at one point
of time, the G.S.O. was amended, as per G.S.O. No.229,
on 7th May, 1992 interpreting that the ceiling limit
shall stand revised, as revised by the Government and,
therefore, he submitted that the said G.S.O. shows that
even the Board considered the term of the settlement qua
gratuity accordingly.
11. I am afraid that such a contention can be
accepted when a plain and simple meaning can be extracted
from the term of the settlement for gratuity. Any
interpretation or action de hors the same cannot be
considered as a valid ground for asserting the right of
receiving additional amount of gratuity. It is well
settled that any illegal action by any authority cannot
be made as the basis for the purpose of either claiming
discrimination or for asserting the right thereon,
otherwise it would result into perpetuating the
illegality and, therefore, the said contention of
Mr.Desai cannot be accepted.
12. Mr.P.R.Desai, learned Counsel for the
petitioners, has relied upon the decisions in the matter
between The Manager, East Donger Chickli Colliery of
Western Coalfields Ltd. vs. D.D.Dubey & Ors., reported
at 1998 F.L.R. 649, and in the matter between R.Nagaraju
vs. Managing Director, A.P.State Warehousing
Corporation, Hyderabad, reported at 1998 II C.L.R . 985,
for contending that if there is a better term of the
settlement, such right can always be asserted.
In my view, both the said decisions are not at
all connected with the subject matter or the issue which
is to be considered by the Court and, therefore, the said
decisions have no applicability and even if the
principles, as laid down, are considered and accepted,
then also, the same would be of no help to the
petitioners in the present case.
13. Mr.Desai, learned Counsel for the petitioners,
has also relied upon a decision of this Court in the case
of Gujarat State Road Transport Corporation vs.
Rameshbhai M.Makwana, reported at 2002(3) G.L.H. 282,
for contending that any G.S.O. will not nullify the
object or effect of the settlement. As observed earlier,
even if the G.S.O. is not considered when the term of
the settlement itself is self explanatory, and plain and
literal interpretation and meaning can be extracted.
Further, it is found by this Court that there shall not
be any automatic revision of the ceiling limit and,
therefore, the said decision would be of no help to the
petitioners.
14. If the matter is examined even from the
touchstone of Articles 14 and 16 of the Constitution of
India, keeping in view the observations made by this
Court in the case of the Gujarat State Road Transport
Corporation vs. Chandrakant Tapubhai Vyas (supra), it
cannot be said that the action of not paying the
gratuity, taking the basis as revised by the State
Government for its employees, is arbitrary or
unreasonable. As observed earlier, if the Board has
acted under the settlement strictly, as per the language
employed in the settlement, the action cannot be said to
be unreasonable or arbitrary. Further, it is not the
case of the petitioners that any of the employees, who
have retired from 1st April, 1995 to 23rd September,
1997, are paid the amount of gratuity taking as the basis
of the revision of the ceiling limit by the State
Government. So far as the amendment in G.S.O. dated 7th
May, 1992 is concerned, as observed earlier, the same
cannot be said to be a valid action in accordance with
the terms of the settlement. Moreover, as observed
earlier, any settlement resulting into additional
financial burden can always be with a reasonable
classification by putting a cut off date. It is not even
the case of the petitioners that any date fixed in the
settlement for giving effect to the settlement, is, in
any manner, unreasonable or arbitrary. When the Gujarat
Electricity Board has treated all those employees, who
are covered by the settlement at par, and the payment of
the gratuity is accordingly made, it cannot be said that
the action would be rendered unreasonable or arbitrary.
15. In view of the above, all the petitions fail and
are dismissed. Rule is discharged. Considering the
facts and circumstances of the case, there shall be no
order as to costs.