JUDGMENT
H.K. Rathod, J.
1. Heard learned Advocate Mr. Ramnandan Singh for petitioners, Mr. Sunit S. Shah, learned GP with Ms. Bhavika Kotecha, Ms. Kiran Pandey and Mr. KJ Dwivedi, learned AGPs for the respondent State authority and Mr. Pranav G. Desai, learned Advocate for respondent Baroda Municipal Corporation.
2. When these matters are taken up for hearing, learned advocate Mr. Ramnandan Singh appearing for the petitioner has submitted that the petitions involving same and identical question filed by the concerned employees of the respondent corporation but same have not been notified because of the office objections raised by the Registry and he requested before this Court to call for papers of those petitions and accordingly, considering his request, registry of this Court was directed to dispense with the office objections raised by the registry and to send papers of those petitions and therefore, registry has sent papers of Special Civil Application No. 327, 328, 330,331,332,333,334, 336, 337 and 338 of 2008 before this Court and same have been disposed of along with the matters which are notified in today’s board as identical in nature raising same question and it is open for the learned Advocate Mr. Pranav G. Desai to file his vakalatnama for the respondent corporation in those matters which have been sent by the registry of this Court today for being disposed of by way of this judgment. Government Pleader may also file appearance in such matters on behalf of the State Authority.
3. Rule. Service of Rule is waived by learned Advocate Mr. Pranav G.Desai on behalf of the respondent Baroda Municipal Corporation in each matter. Service of rule is also waived by Mr. Sunit S. Shah, learned GP with Ms. Bhavika Kotecha, Ms. Kiran Pandey and Mr. KJ Dwivedi, learned AGPs for the respondent State authority in each matter. In the facts and circumstances of the case, and with consent of the learned advocates for the respective parties, the matters have been taken up for final hearing today.
4. In this group of petitions, petitioner is praying for quashing and setting aside the impugned order dated 26.10.2006 passed by respondent No. 1 by holding notification dated 14.12.2001 and 9.9.2002 issued by respondent No. 1 and circular dated 12.9.2002 issued by respondent No. 2 as illegal and unlawful. Petitioner is also praying for issuing appropriate direction against the respondents directing them to pay gratuity as per the provisions of the Payment of Gratuity Act, 1972 to all the retiring employees of the respondent corporation. In support of these prayers, it was submitted by the learned Advocate Mr. Singh that respondent corporation is paying pensionary benefits under the Bombay Civil Services Rules and also paying gratuity amount under the Payment of Gratuity Act from 1983 onwards. The Industrial Tribunal passed award on 13.1.1977 in Reference No. 159 of 1975 wherein Industrial Tribunal directed that the eligible employees of the Baroda Municipal Corporation shall be paid gratuity as per Act of 1972 and allowed the reference accordingly, meaning thereby, the tribunal has decided that the Gratuity Act is applicable to the employees of the Baroda Municipal Corporation. Said award was accepted by Corporation and not challenged by corporation before the higher forum and on that basis, the corporation is paying benefit of gratuity under the Payment of Gratuity Act, 1972. Government was moved by the Corporation by sending proposal dated 16.3.1999 (page 62) addressed to the Secretary of the Corporation. According to the Corporation, reason for moving such proposal is that both the benefits, if they are to be paid by the corporation, it is causing financial loss to the corporation. According to the corporation as per the said proposal, pay scales of the employees have been revised as per recommendations made by the 5th Pay Commission. Employees are being paid pensionary benefits as per the BCSRs. Over and above that, commuted pension is also given and if the payment of gratuity is made as per the BCSRs, then, the amount equal to the amount payable under the Gratuity Act, 1972 would be required to be paid. Thus, if the implementation of the Payment of Gratuity Act, 1972 is continued, then, payment of pensionary benefits in addition to the payments of gratuity would be required to be given which is causing financial loss to the establishment. It was submitted by the corporation in the said proposal that in this regard, as per Section 5, appropriate Government i.e. State Government is competent to grant exemption to the Municipal Corporation from the implementation of the Gratuity Act, 1972. Therefore, it was requested in the said proposal for presenting the matter before the General Body of the Corporation through Standing Committee for obtaining sanction of the General Body for empowering the Commissioner to make necessary representation in the Government for obtaining exemption from the implementation of the Payment of Gratuity Act, 1972. Accordingly, having permission from the General Board, powers were given to the Municipal Commissioner and proposal was sent in the Government which was considered by the State Government by issuing Yadi dated 14.12.2001 giving exemption to the respondent corporation wherein it was mentioned that the employees/workmen of the Vadodara Municipal Corporation are getting more benefits than the benefits under the Payment of Gratuity Act, 1972, therefore, employees of the electricity and gas department of the Vadodara Municipal Corporation were exempted from the Payment of Gratuity Act under Section 5 of the Act. Accordingly, having permission from the General Board, powers were given to the Municipal Commissioner and, thereafter, proposal made by the Corporation to the State Government was considered by the State Government by giving exemption to the class of employees working in the electricity and gas department. Thereafter, said exemption was challenged by the concerned employees by filing writ petitions before this Court wherein this Court directed the concerned employees to make representation to the Government and Government will examine their case in accordance with law. Accordingly, representation was made by the concerned employees in the State Government. Thereafter, corporation has passed order on 12.9.2002 and thereby, benefits of the Yadi dated 14.12.2001 were extended in favour of all the employees including working in the Electricity and Gas Department of the Vadodara Municipal Corporation. The State Government has passed another resolution on 3.9.92 amending the earlier resolution dated 14.12.2001 and extended the exemption covered all the employees working in corporation. Said resolution was issued by exercising powers under Section 5 of the Payment of Gratuity Act, 1972. On 12.9.2002, page 39, the Corporation issued circular in respect of the exemption given by the State Government in favour of the corporation. Representation has been decided by respondent No. 1 on 26.10.2006. Concerned authority has considered various factors as well as considered representation from both the parties, one from the employees and another from the Municipal Corporation and, thereafter, the authority has come to the conclusion that application made by Corporation with the approval of the General Board has been rightly granted by the State Government after considering the report from the Labour Department. It has also been considered that Vadodara Municipal Corporation is a local self government giving benefits of pension to its employees as per provisions of the BCSRs. As per the BCSRs, pension includes pension, commuted pension and gratuity and, therefore, in comparision to the gratuity available under the Payment of Gratuity Act, 1972, these pensionary benefits available under the BCSRs are more beneficiary whereas the Payment of Gratuity Act, 1972 includes the Gratuity alone, therefore, pensionary benefits are more beneficiary. Of course, amongst both the gratuities, amount of gratuity available under the Act is more and as per the prima facie view, it is higher by 10 to 15 per cent than the amount of gratuity available under the BCSRs but as against that, benefits of pension/family pension/commuted pension are not available, therefore, benefits available under the BCSRs are more beneficial. Therefore, State Government which is an independent authority considering the interest of the workers, came to the conclusion that while comparing both the benefits that after all looking to the benefits under the BCSRs as against the benefits under the Payment of Gratuity Act, 1972, benefits under the BCSRs are more favourable and beneficial. Thereafter, the respondent authority has considered the award referred to above and considered the contention of the union that before making any change in reference to the said award, notice of change under Section 9A of the ID Act, 1947 is required to be given or not. In reference to the said contention of the union, it was the contention of the Corporation before the respondent authority that the Industrial Court has merely asked to make applicable the Payment of Gratuity Act, 1972 and that does not mean that it is binding to the State Government while granting exemption under Section 5 of the Act. Intention of the Industrial Court was to see that the benefits under the Gratuity Act, 1972 are extended in favour of the workmen of the corporation and the corporation is paying pensionary benefits as per the BCSRs which are more favourable than the benefits under the Gratuity Act because pension includes the gratuity and workmen are entitled for any one of the two benefits. Both the benefits cannot be available as per law. Considering the contentions of both the side on this aspect, the authority came to the conclusion that as the workmen are getting better benefits, change notice under Section 9A of the ID Act, 1947 is not required to be given. Notice of change under Section 9A is necessary if any adverse order or existing condition of service is adversely affected, otherwise not. Here, benefits of BCSRs is more favourable and beneficial and, therefore, notice under Section 9A is not necessary. It has also come to the conclusion that the gratuity is not included in the Fourth Schedule of the said Act, therefore, provisions of Section 9A of the ID Act, 1947 are not applicable. The respondent authority has also come to the conclusion that the BCSRs are the rules of the State Government and it includes the pension wherein responsibility for payment is that of the State Government. Pension includes pension, commuted pension, family pension and gratuity, therefore, it is not possible to bifurcate the part of pension therefrom whereas the Payment of Gratuity Act, 1972 includes the Gratuity alone and, therefore, according to the respondent authority, the calculations made by the respondent corporation is not misleading and in reality, it is in the interest of the workmen to get the benefits under the BCSRs and after making the discussion as aforesaid, the authority has come to the conclusion that the representation made by the concerned employees is liable to be rejected considering interest of the workmen/employees and accordingly rejected the representation by upholding and maintaining exemption under Section 5 of the Act dated 14.12.2001 and 3.9.92.
5. Learned Advocate Mr. Desai for the corporation has submitted that detailed decision is given by the State Government by giving cogent reasons in support of the exemption which is not properly understood by the union and, therefore, because of the misunderstanding on the part of the union, this kind of petitions have been filed, otherwise, in substance, he has prepared one statement while considering the present situation for considering as to which benefit is more beneficial and favourable. Copy of such statement prepared by him was given to learned advocate Mr. Singh for the petitioners and Ms. Kotecha, learned AGP for the State Authority. Said statement is reproduced as under:
Statement showing Calculation of Gratuity as per the Payment of Gratuity Act, 1972:
Sr No
SCA No.
Pen. Case No.
Name
Payments as per Gratuity Act
Payments as per BCSR
Amt. Of Higher Payment as per BCSR
Gratuity
Commute
Total
1
28639/07
C/1/2387
Mr. R.J. Patel
257281
222481
Prov.
Pension
22481
– NA –
2
28640/07
C/1/2853
Mr. P.C. Vyas
240149
212009
â¬S
212009
– NA –
3
28641/07
C/1/2540
Mr. N.P. Ghasade
290559
224598
160406
385004
94445
4
28642/07
C/1/2439
Mr HG Shah
278848
234564
Pro.
Pension
234564
NA
5
28643/07
C/1/2620
Mr RC Rana
186000
161200
212150
373350
187350
6
28644/07
C/1/2746
Mr DS Solanki
272993
236594
204906
441500
168507
7
28587/07
C/1/2360
Mr DR Chiniwala
193200
167440
222539
389979
196779
8
28588/07
C/1/2493
Mr IP Raj
202363
175383
235764
411147
208784
9
28589/07
Gas
Mr MI Khan
312742.5
238739
NA
238739
NA
10
28590/07
C/1/2198
Mr SD Kulaye
364079.41
231969
199731
431700
67620.59
11
28591/07
C/1/2712
Mr NC Shah
237683
194222
210598
404820
167137
12
28592/07
C/1/2137
Mr SD Bhatt
302540
240356
222177
462533
159993
13
28593/ 07
C/1/2804
Mr GC Sheth
327066
246164
202836
449000
121934
14
28594/07
C/1/2537
Mr VV Halabe
272993
236594
20963
446157
173164
15
28595/07
C/1/2696
Mr IM Suthar
278371
25177
215513
430690
152319
16
2896/07
C/1/2334
Mr BA Patel
300273
264949
191970
456919
156646
17
28645/07
C/1/2726
Mr RM Solanki
218996
189789
199214
289003
17007
18
25144/07
C/1/2170
Mrs. MP Shah
–
179437
19537
374474
–
6. Learned AGP Ms. Kotecha for the State authority has submitted that it is within the powers of the State Government when it is satisfied that particular benefit under BCSRs is more favourable or more beneficial in the interest of workers than the other benefit of Gratuity Act, 1972, then, it can grant such exemption to any establishment which is covered by the Act. She also submits that there is no mala fide alleged against the State Government. There is also no arbitrariness alleged against the State Government by the petitioners in granting such exemption and, therefore, petitions challenging the decision of the State Government are not maintainable since no mala fides and/or arbitrariness is alleged against the State Government. As per her submission, exemption granted by the State Government is just and proper and it gives more benefits to the employees under the BCSRs and the said order was passed by the State Government after receiving report from the labour commissioner at length and cogent reasons have been given by the respondent authority and even looking to the same, under the Payment of Gratuity Act, 1972, pensionary benefits are not available to the employees whereas under the BCSRs, such benefits are available to the employees and it is very clear legal aspect that a Government employees those who are receiving benefits under the BCSRs are not entitled as per law for the benefits under the Payment of Gratuity Act, 1972 at the same time, as per the decision of this Court in Junagadh District Panchayat v. Surendrasinh Dayabhai Rathod and Ors. reported in 2006(4) GLR page 2849.
7. Learned Advocate Mr. Singh has relied upon the decision of this Court (Coram : Hon’ble Ms. Justice RM Doshit, J.) in case of Rajkot Municipal Corporation v. Aniruddh Fulshankar Shukla reported in 1999-2-LLJ-830 : 1999 (82) FLR 927. He relied upon the said judgment on the ground that the claim made by the concerned employees before the controlling authority which has been denied by the corporaiton. Ultimately, controlling authority has decided against the corporation and granted benefits to the concerned employees which has been confirmed by the appellate authority and the High Court and, therefore, Payment of Gratuity Act, 1972 is applicable to the employees of the corporation and such employees are entitled for such benefits under the Payment of Gratuity Act, 1972 as the Act is applicable. The question of granting exemption from implementation thereof is not arising. Whether the State Government has rightly granted exemption in favour of the Baroda Municipal Corporation or not, for that, certain observations have been made by this Court in the aforesaid decision which are more important and, relevant, therefore, para 5 of the said judgment is reproduced as under:
The Honourable Supreme Court in the matter of Municipal Corporation of Delhi v. Dharam Prakash Sharma has held that the Payment of Gratuity Act, 1972 being a special provision shall have an overriding effect over any scheme that might have been adopted by the concerned employer, and even if the benefit is availed of under the concerned scheme, the employee would be entitled for payment of gratuity under the Act. In view of the above judgment of the Honourable Supreme Court, the defence raised by the corporation can not be accepted. It is not disputed that the corporation has not applied for exemption under Section 5 of the Act. Unless the appropriate Government exempts the corporation from the operation of the provisions of the Act, the Corporation shall be bound to make payment of gratuity under the Act.
8. In para 6 of the said judgment, it has been observed as under:
For the reasons recorded herein above, the impugned orders made by the Controlling authority and confirmed by the appellate authority do not call for interference. However, it is evident that the pension scheme has been introduced in lieu of the benefit conferred under the Act. No employee, therefore, can have a right to benefit both, under the Act and also under the pension scheme. It is, therefore, clarified that the petitioner-corporation shall be at liberty to adjust the amount of gratuity and pension paid to the concerned respondents under the pension scheme against the amount of gratuity which is payable under the impugned orders. The corporation shall also be at liberty to discontinue the payment of monthly pension to the concerned respondents.
9. Thus, aforesaid observations are very relevant relating to the substance of the present matter. In short, both the benefits are not available to any employees working in any establishment that is the decision given by this Court and that is the legal position under both the Acts. State Government has only inquired or verified while exercising powers under Section 5 of the Act which is reproduced as under:
5. Power to exempt: (1) The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment factory mine oil field, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable then the benefits conferred under this Act.
(2) The appropriate Government may by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory mine oilfield plantation port railway company or shop to which this Act applies from the operation of the provisions of this Act, if in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less than the benefits conferred under this Act.
(3) A notification issued under Sub-section () or Sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of the Act but no such notification shall be issued so as to prejudicially affect the interests of any person.
10. Therefore, considering the relevant provisions and the language used in statutory provisions, according to my opinion, State Government was right in granting the exemption by exercising the powers under Section 5 of the Act and detailed and cogent reasons have been given after considering the grievance of the petitioner by respondent No. 1 and according to my opinion, State Government has rightly granted exemption to the Baroda Municipal Corporation while exercising the powers under Section 5 of the Act of 1972 and in doing so, the State Government has not committed any error and no infirmity is pointed out by the learned Advocate Mr. Singh and, therefore, same does not warrant any interference of this Court in exercise of the powers under Article 226/227 of the Constitution of India.
11. According to my opinion, decision to grant exemption is in the larger interest of the employees, those who are working in the corporation because ultimately pensionary benefits along with gratuity will remain continue till person dies and even after death of the concerned employee, benefit will remain continue in the form of family pension in favour of the widow or the legal heirs of the deceased employee and same is more beneficial in comparision to the gratuity under the Payment of Gratuity Act, 1972 and, therefore, decision of the State Government is more beneficial to the employees concerned. Learned advocate Mr. Singh for the petitioner has raised contention that while giving exemption by the State Government, no better scheme has been introduced by the State Government but this contention raised by learned advocate Mr. Singh cannot be accepted on the ground that the powers under Section 5 of the Payment of Gratuity Act, 1972 is to be exercised while comparing the benefits available under the said Act of 1972 and it has to be considered as to which benefits are more beneficial/favourable to the employees of the Corporation and therefore, said contention cannot be accepted as the learned Advocate Mr. Singh appearing for the petitioner has also not been able to point out that the exemption granted in favour of the Baroda Municipal Corporation is adversely affecting existing rights of the employees concerned and the benefits available to them are lesser than the benefits available under the Payment of Gratuity Act, 1972. He has also not been able to point out as to on what basis employees can avail or entitled for both the benefits at the same time. Therefore, matter does not require interference of this Court in exercise of the powers under Article 226/227 of the Constitution of India and, therefore petitions are required to be dismissed.
12. In Janak Prasad Singh v. Bihar State Electricity Board reported in 2004-II-LLJ page 1080, identical question of powers to exempt the establishment from the Payment of Gratuity Act, 1972 was examined by the Division Bench of Patna High Court. It was held that it depends on two conditions. Benefit available to employees not less favourable than benefit under Act and retrospective exemption, if any, not to cause prejudice to interest of any person. It was then held that both conditions were fulfilled. Relevant observations made by the Division Bench of Patna High Court in para 9, 13, 14, 15, 18, 19, 20, 27, 29, 31, 32 are reproduced as under:
9. It is manifest that entitlement of the petitioner to gratuity under the Gratuity Act turns on the validity or otherwise of the exemption notification dated September 15, 2003. If it is a valid piece of subordinate legislation, the establishment of the Board having been exempted from operation of the Gratuity Act the petitioner would not be entitled to any gratuity under the Act; else, the Act being otherwise applicable to the Board the petitioner would be entitled to the same. On the resumed hearing of the case, accordingly, submissions of the counsel for the parties centre around the legality of the exemption notification dated September 15, 2003.
10 to 12 : xxx
13. Thus, in our opinion, the main question to be decided in the present case is whether the pension/gratuity benefits available to the employees of the Board under the Bihar Pension Rules read with Service Regulations, 1976 are less favourable than the benefits available under the Gratuity Act. Before considering the question, we may reject the submission advanced on behalf of the petitioner that the exemption amounts to forfeiture which cannot be done without initiating any proceeding and/or opportunity of hearing to the person concerned. It is to be kept in mind that the denial of gratuity under the Gratuity Act is not by way of punishment it is rather the consequence of exemption under a statutory provision. So far as the Bihar Pension Rules/Service Regulations are concerned, denial of gratuity thereunder is the result of punishments including discharge from service on charges in separate departmental proceedings which the petitioner has separately challenged and his writ petitions are pending.
14. It is true that gratuity is not a bounty paid to the employee on the sweetwill or whim of the employer. Nevertheless being creature of statute entitlement would depend on the fulfilment of conditions laid down in the statute. It is also true that but for the exemption notification under Section 5(1), read with Section 5(3) of the Gratuity Act, the entitlement of the petitioner to gratuity would be governed by the Gratuity Act and if that were so, the same would not be liable to be curtailed or done away with, except in the manner laid down in the Act. The provisions of the Bihar Pension Rules, otherwise applicable, read with the Service Regulations are materially different and it is thus clear that the question as to applicability of the Act is of vital concern to the petitioner but then it would boil down to the same question as to whether exemption notification is in accordance with law or not. If the notification is a valid piece of subordination legislation, it would follow that the petitioner would not be entitled to gratuity under the Gratuity Act instead his entitlement would be worked out under the relevant provisions of the Bihar Pension Rules read with the Service Regulations whereunder being a discharged employee he is not entitled to gratuity.
15. As seen above the State Government is empowered to exempt by notification any establishment etc. from the purview of the gratuity Act if in the opinion of the appropriate Government the gratuity and pensionary benefits available to the employees of such establishment etc. are not less favourable than the benefits conferred under the Act. Such exemption may be made retrospective but not so as to prejudicially affect the interest of person or persons. Where there is no infringement of these two safeguards the employee cannot successfully assail the decision to exempt the establishment. The expression “in the opinion’ occurring in Section 5(1) leaves little room for doubt that grant of exemption is dependent on the satisfaction of the appropriate Government with which this Court cannot interfere as if sitting in appeal, in writ jurisdiction.
16 & 17 : xxx
18. In the letter addressed by the secretary to the Board dated September 9, 2003 which finally clinched the issue with the State Government leading to issuance of the exemption notification, the relevant facts were stated with reference to four charts illustrating how pension and gratuity benefits available to the officers and the employees of the Board under the Bihar Pension Rules are not less favourable than those conferred by the Gratuity Act. Though a number of affidavits have been filed on behalf of the petitioner, no attempt has been made to find error in the relevant statements and/or the charts. For example, it has been stated that Section 4 of the Gratuity Act provides for a minimum qualifying period of five years of continuous service except in the case of dath or disablement) whereas under the Bihar Pension Rules there is no minimum qualifying period for death cum retirement gratuity. The maximum ceiling of amount of amount of gratuity both under the provisions of Gratuity Act and the Bihar Pension Rules is the same i.e. 3.5 lakhs. Payment of Gratuity under the Gratuity Act is one time payment to the employees or their heirs whereas under the Bihar Pension Rules, apart from one time payment of gratuity, the retired employees get regular monthly pension till their life time and further in case of death, family pension to the dependent family members. The pension package available under the Bihar Pension Rules provides a better support system to the retired officer/employees and their dependents unlike the benefits conferred by the Gratuity Act.
19. Even in terms of the actual monetary benefits gratuity under the Bihar Pension Rules to the employees and officers of the Board are more favourable compared to the gratuity payable under the Gratuity Act. The stand of the Board has been explained with the help of the four charts two of them for workmen and officers each on the basis of lowest and highest payable pay scale. The Chart with respect to officers worked out on the basis of minimum pay scale is enclosed as Annexure II (c) to the aforesaid letter of the Secretary while the chart with respect to officers drawing maximum pay has been enclosed as Annexure II(d)to the letter. It would be useful to refer to the relevant charts so as to make them part of the judgment, as under:
COMPARATIVE STATEMENT OF BENEFITS ADMISSIBLE UNDER PAYMENT OF GRATUITY ACT, 1972
VIS-A-VIS UNDER G.P.F.-CUM-PENSION SCHEME ADOPTED BY THE BOARD OF MR.’C’ SECTION
OFFICER.
Benefit under Gratuity Benefit under Pension Rules Act, 1972 adopted by the Board
(A) Short term benefit: (A) Short term benefit:-GRATUITY GRATUITY
Pay Rs. 14000/-Pay Rs. 14000/
D.A. @ 43% Rs. 6020/-D.A. @ 43% Rs. 6020/-EMOLUMENT Rs. 20020/-EMOLUMENT
Rs. 20020/-Rs. 20020x37x15 Rs. 4,27,350/-Amount of Gratuity 26
20020×16.5=Rs. 3,30,330/
(b) Pension Rs. 10,010/-P.M.
(including D.A.Rs.3010/-) But limited to
Rs. 3,50,000/
(c) Commuted value of Pension if 40% of
Pension is commuted) i.e. Rs. 2800×125.52=
Rs. 3,51,456/-(d) and after commutation of pension balance payable amount of
pension Rs. 4200/ pm
D.A. @43% Rs. 3010/pm Total Rs. 7210/pm
Thus the employee gets Thus the employee gets a sum only one time benefit of Rs.
6,88,996/- by way of of Rs.3,50,000/- and one time payment with nothing else in
facilities of Monthly future from the Board. Pension and D.A. thereon payable by
the Board.
B) Long Term Benefit (B) Long Term Benefit (Recurring Income) (Recurring Income)
If whole amount is If the whole amount i.e. invested in Bank for Amount of
Gratiuity: Rs. 330330 15 years Interest on Amount of Commutation:-Rs. 350000/-
Rs. 351456
Total Rs. 681786 is invested in Bank for 15 yrs
350000×8=Rs. 2333/P.M. Int. on Rs. 681786/-1200 =681786×8=Rs. 4545/- P.M.
1200 Thus recurring income on account of Int. on above amount
Rs. 4545/-Add.Monthly Pension Rs. 4200/-(excluding commuted
portion Rs. 2800/-) & D.A. upto 15 yrs Rs. 3010/-pm TOTAL
Rs. 11755/-pm Note:-After 15 Yrs. Full Pension & DA Rs. 10010/-
pm Monthly Int.on Investment: Rs. 4545/-pm
TOTAL Rs. 14555/-pm
Thus the employee has at best a monthly in-assured income of Rs.11755/-come of
Rs. 2335/-P.M. for 15 Yrs. and also gets even if he invest the his full pension
restored entire amount of after 15 Yrs. making his Gratuity in Bank income again
Rs. 14555/- P.M.
Assumption:- i. Mr. C joined the Board on the post of Versus Section Officer on
15.5.64.
ii. He did not get promotion but granted S.G. & SSG scale during the service and
retired on 30.6.2001.
iii. His basic pay on 1.7.2000 was Rs.14000 (Including three stagnation increme-
nt) in the pay scale of Rs. 6825
-225 – 7095 – 275 – 13175.
iv. D.A. has been taken @ 43% only.
v. Rate of Interest on Investment has been taken as 8% P.A.
COMPARATIVE STATEMENT OF BENEFITSADMISSIBLE UNDER PAYMENT OF GRATUITYACT, 1972
VIS-A-VIS UNDER G.P.F.-CUM-PENSION SCHEME ADOPTED BY THEBOARD OF MR.’D’
Engineer-in-Chief Benefit under Gratuity Benefit under Pension Rules Act, 1972
adopted by the Board
(A) Short term benefit: (A) Short term benefit:-GRATUITY GRATUITY
Pay Rs. 21400/-Pay Rs. 21400/-
D.A. @ 43% Rs. 9202/-D.A. @ 43% Rs. 9202/-EMOLUMENT Rs. 30602/-
EMOLUMENT Rs. 30602/-Rs. 30602x37x15 Rs. 6,53,235/-Amount of
26 Gratuity 30602×16.5 =Rs. 5,04,933/-but limited to Rs. 3,50,000/-
(b) Pension Rs. 15301/-PM. (including D.A.Rs.4601/-)
But limited to Rs.3,50,000/
(c) Commuted value of if 40% of Pension is commuted) i.e.Rs. 4280×125.52 =
Rs. 5,37,226/
(d) and after commutation of pension also balance payable amount Rs. 6420/pm
D.A.@43% Rs. 4601/pm Total Rs.11021/pm
Thus the employee gets Thus the employee gets a sum only one time benefit of
Rs. 8,98,247/- by way of Rs. 3,50,000/- and of one time payment with nothing
else in facilities of Monthly future from the Board. Pension and D.A. thereon
payable by the Board.
(B) Long Term Benefit (B) Long Term Benefit (Recurring Income) (Recurring
Income) If whole amount is If the whole amount i.e. invested in
Bank for Amount of Gratiuity: Rs. 350000 15 years Interest
on Amount of Commutation-Rs. 350000/ : Rs. 537226
Total Rs. 887226
is invested in Bank for fifteen years 350000x8=Rs. 2333
/P.M. Int. on above amount 1200 of Rs. 8,87,226/- =8,87,226x8/
1200 =Rs. 5915/- P.M.
The recurring income on account of Int. on above amount
Rs. 5915/-Add. Monthly Pension Rs. 6420/-(excluding
commuted portion Rs. 2800/-) & D.A. upto 15 yrs Rs.
4601/TOTAL Rs. 16936/Note:-After 15 Yrs.
134 THE INDIAN LAW REPORTS, [VOL. LXXXIII(1)
Full Pension
& DA Rs.15301/-pm
Add Monthly Int.on
Investment: Rs. 5915/-pm
TOTAL RS.21216/-pm
Thus the employee has Thus the employee gets an at best a monthly in-assured
income of Rs. 16936/-come of RS.2333/-P.M. for 15 Yrs. and also gets even if
he invest the his full pension restored entire amount of after 15 Yrs. making
his Gratuity in Bank income again Rs. 21216/- P.M.
Assumption:- i. Mr. D joined the Board on the post of AEE on 15.5.64 ESE, CE
and lastly to the post of Eng-in-Chief and superannuated on
30.6.2001.
ii. He was promoted to the post of EEE,ESE,CE and lastly to the
post of Engg.-in Chief and superannuated on 30.6.2001.
iii. His basic pay on 1.7.2000 was Rs. 21400 in the pay scale of
Rs. 20900
500-21400-600-23800
iv. D.A. has been taken @ 43% only.
v. Rate of Interest on Investment has been taken as 8% P.A
20. As stated above, no attempt was made on behalf of the petitioner to find error in the calculation shown in the aforesaid charts. Conclusion therefore is irresistible that the pension/gratuity benefits available to the officers (also workmen) if not more favourable, are not less favourable than those available to them under the Gratuity Act and therefore we have no hesitation in holding that there is no violation of the condition laid down in Section 5(1) of the Gratuity Act.
21 to 26: xxx xxx
27. It was submitted that the impugned notification does not contain reasons for allowing exemption and therefore on this ground too it is liable to be struck down. The submission is fit to be summarily rejected. It is well settled that administrative order need not contain reason. The orders of the administrative authorities who have no statutory or implied obligations to state reasons or grounds of decision are not rendered illegal merely on account of absence of reasons, and where such reasons are not indicated in the order, it is open to the respondents to produce the records and show that the decision was taken for good reasons. Reference may be made to Union of India v. EG Nambudiri AIR 1991 SC 1216 : 1991 (3) SCC 38 : 1991-II-LLJ-594. The relevant file as indicated above was produced and perusal thereof leaves no room for doubt that the exemption was granted after due application of mind and on consideration of the materials made available by the Board.
28. xxx
29. It is well settled that while making judicial review of administrative action the Court cannot go into the correctness or otherwise of the decision itself. The jurisdiction of the Court is limited to finding out if there has been any error in the decision making process. No error in the decision making process or violation of the relevant provisions of the Gratuity Act or any other law was pointed out to warrant interference with the impugned notification in writ jurisdiction. The notification being a valid piece of subordinate legislation, the petitioner thus cannot claim any right under the Gratuity Act. His claim to gratuity is governed by the Bihar Pension Rules and as indicated above, being a discharged employee, he cannot claim any right to gratuity under the Pension Rules.
30. xxx
31. As regards the compassionate allowance under Rule 46 of the Pension Rules described as financial benefits in the writ petition, the case of the Board is that in terms of the said rule which provides for compassionate allowance to a Government servant dismissed or removed for misconduct etc. not exceeding 2/3rd of the pension which would have been admissible to him if he had retired on medical certificate, two thirds of the amount of pension has been paid to the petitioner.
32. For the reasons stated above, the points urged on behalf of the petitioner having been rejected, this writ petition must fail and the same is accordingly dismissed but without any order as to costs.
13. Considering the facts of the case decided by the Division Bench of Patna High Court in light of the facts of the case before hand, exercise of power to exempt establishment from Gratuity Act, 1972 depends on two conditions. One condition is that the benefit available to the employees should not be less favourable than the benefit under the Gratuity Act and if there is retrospective exemption, then, it should not cause prejudice to interest of any persons. In the instant case, considering the statement submitted by learned Advocate Mr. PG Desai before this Court showing calculation of gratuity as per the Payment of Gratuity Act and the payments of gratuity, commutation as per the BCSRs, it is clear that the benefits available under the BCSRs are more favourable and better than the benefits available under the Payment of Gratuity Act, 1972. Not only that, over and above the benefit of gratuity and commutation available under the BCSRs, employees would also be eligible for the pension, family pension etc. which would be regular income of the employee and dependents of employee in case of death of employee. Payment of Gratuity under the Gratuity Act is one time payment to the employees or their heirs whereas under the BCSRs Pension Rules, apart from one time payment of gratuity, the retired employees get regular monthly pension till their life time and further in case of death, family pension to the dependent family members. The benefits available under the Bombay Civil Service Rules Rules provides a better support system to the retired officer/employees and their dependents unlike the benefits conferred by the Gratuity Act. This aspect has not been challenged by learned Advocate Mr. Singh before this Court but his attempt was to have both the benefits at a time which is not permissible as per law. Therefore, submissions made by learned Advocate Mr. Singh are not acceptable and same are rejected and these petitions are required to be dismissed.
14. The petitioners are not able to justify their claim of gratuity under the Act, 1972. The petitioners are those who have retired or resigned after 14.12.2001. Therefore, they are governed under exemption notification dated 14.12.2001. The exemption given from Act, 1972, then, question of claiming benefits under Act, 1972 does not arise unless notification dated 14.12.2001 is set aside. The petitioners want double benefits, one of pension as per BCSRs and also benefits of gratuity under the Payment of Gratuity Act, 1972 which cannot be given as per decision of this Court as referred above 1999 (2) LLJ 830. Therefore, petitioners have failed to establish their claims and also failed in pointing out any infirmity in the impugned notification dated 14.12.2001. The petitioners have also failed to establish before this Court that the benefits under the Act, 1972 are better and more favourable in comparision to the benefits under the BCSRs. They have also failed to establish that the benefits under the BCSRs are less favourable/beneficial in comparision to the benefits under the Payment of Gratuity Act, 1972. These two conditions incorporated in Section 5 satisfied that benefits under the Act 1972 are less favourable, then, State Government is competent and empowered to grant exemption from Act, 1972 to class of employees working under any Establishment which has rightly been considered by the State Government while issuing notification of exemption dated 14.12.2001.
15. It is a settled law laid down by the apex court and this Court from time to time that the Court cannot go into the correctness or otherwise of the decision itself. The jurisdiction of this Court is limited to finding out if there has been any error in the decision making process. Learned Advocate Mr. Singh for petitioners has not been able to point out any error in the decision making process or violation of the relevant provisions of the Gratuity Act or any other law warranting interference of this Court in exercise of the powers under Article 226/227 of the Constitution of India with the impugned notification. The decision dated 26.10.2006 is also legal and valid and no error has been committed by respondent No. 1 in making the said decision. The notification being a valid piece of subordinate legislation, the petitioners cannot claim any right under the Gratuity Act. His claim to gratuity is governed by the BCSRs Pension Rules and as indicated above, being a retired employees, they cannot claim any right to gratuity under the Gratuity Act, 1972. Therefore, these petitions are required to be dismissed.
16. Accordingly, for the reasons recorded herein above, these petitions are dismissed.