Municipal Corporation of Delhi vs Thandapani

Siddharth Mridul, J.—The present writ petition has been filed on behalf of the Municipal Corporation of Delhi (in short ''Corporation'') assailing the order passed by the Appellate Authority under the Payment of Gratuity Act, 1972 (in short ''Act'').

Counsel appearing on behalf of the Corporation initially asserted that in similar matters notice has been issued for hearing of those petitions in December, 2008. It was, therefore, urged that the present petition should be listed and heard alongwith those petitions. However, in view of the fact that this issue is no longer res integra, in terms of the decision of the Supreme Court as well as of this Court, cited herein below, I am proceeding to dispose of the petition at this stage.

The short question that arises for consideration requires the narration of the brief facts which are encapsulated as follows:

a. The respondent-employee in this petitions is a retired employee of the Corporation. The employee received retiral benefits including gratuity payable in terms of CCS Pension Rules, 1972 (in short ''Pension Rules'') adopted by the Corporation.

b. The respondent-employee filed an application before the Controlling Authority (CA) under the Act claiming the additional amount of gratuity that was payable in terms of the Act.

c. Vide order dated 12th August, 2005 the CA held that, the provisions of the Act continue to apply to employees of the Corporation, regardless of the application of the Pension Rules, till the time that the Central Government, being the appropriate Government, has granted exemption u/s 5(2) of the Act to the Corporation.

d. By order dated 12th August, 2005 the CA thereby computed the gratuity payable under the Act and directed the Corporation to pay the respondent the differential amount of gratuity together with simple interest @ 10% per annum under the provision of Section 7(3-A) of the Act w.e.f. 31st July, 2001 i.e. the date of retirement.

e. The Corporation carried the order of the CA dated 12th August, 2005 in appeal before the Appellate Authority. The appeal filed by the Corporation before the Appellate Authority was dismissed vide order dated 13th September, 2006 which is the subject matter of challenge in the present writ petition.

It is an admitted position that the relevant notification under the Act was issued by the appropriate authority subsequent to the retirement of the respondent-employee in the writ petition. It is fairly conceded by counsel appearing on behalf of the Corporation that the said notification can only have prospective operation. However, he submits that, the notification shall apply as on the date of the consideration of the application filed by the respondent. In other words, since the notification was in force on the date that the CA determined the application of the respondent, the application was not maintainable at all. Counsel for the petitioner, consequently submits that on the date of the notification the CA was functus officio and could not entertain any application under the Act.

I am unable to accept the submissions of the counsel for the Corporation. It is apparent that till the date of the subject notification namely 22nd July, 2005, the Corporation was statutorily obliged to comply with the obligations under the Act. It is seen, that this question has been determined against the Corporation by the decision of the Supreme Court in Municipal Corporation of Delhi Vs. Dharam Prakash Sharma and Another, . In that case the question that arose for consideration was whether an employee of the Corporation would be entitled to payment of gratuity under the Act when the Corporation itself adopted the Pension Rules, particularly when the latter contains provision for payment of pension as well as gratuity. The supreme Court held that:

The Act was a special provision for payment of gratuity." and

Unless there is any provision therein which excludes it applicability to an employee who is otherwise governed by the provisions of the Pension Rules, it is not possible for us to hold that the respondent is not entitled to the gratuity under the Payment of Gratuity Act.

It was categorically held that:

The MCD employee, therefore, would be entitled to the payment of gratuity under the Payment of Gratuity Act. The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the payment of gratuity Act.

The above decision of the Supreme Court has been followed by this Court in Writ Petition (Civil) No. 9318 of 2007, Writ Petition (Civil) No. 6280 of 2008, Writ Petition (Civil) No. 6282 of 2008, Writ Petition (Civil) No. 6284 of 2008 and Writ Petition (Civil) No. 6288 of 2008. Thus, there can be no manner of doubt that employees of the Corporation who retired till the date when the notification came into force would be entitled to be paid gratuity in terms of the Act. However, since they would not be entitled to derive a double benefit they would be entitled to receive only the differential amount between the gratuity calculated under the Act and that paid to them pursuant to the Pension Rules.

It is also observe that the pronouncement of law by this Court in Municipal Corporation of Delhi v. Nand Kishore (102) 2003 DLT 518, is to the effect that "the denial of the payment of the gratuity under the Act is a continuing wrong and there is no question of any delay in approaching the Controlling Authority and the claim of gratuity cannot be resisted on the ground of delay". Therefore, it is axiomatic that it was not necessary for the employee to make an application for the purpose since the denial of the payment of gratuity under the Act is a continuing wrong and the Corporation was statutorily bound to do so on its own. Resultantly, there is no question of any delay in approaching the CA and the claim of gratuity cannot be declined only on that account. In the circumstances, it is not open to the Corporation to deprive any of its employee who retired before the issuance of the subject notification of the payment of gratuity under the Act. Also it was neither necessary for the employee to seek condonation of delay, if any, which he did, nor requisite for the CA or the Appellate Authority to condone the delay, which was done, since the non-receipt of gratuity was a continuing wrong, grant of which could not be precluded only on the question of delay.

Finally the submission on behalf of the Corporation that the CA was functus officio on the date of consideration of the application, does not hold water, for the reason that the notification issued by the appropriate Government exempting them from the operation of the Act was subsequent to the retirement of the respondent-employee, and no such notification can have retrospective operation, so as to, extinguish substantial rights already vested in the employee by virtue of the operation of provisions of law. No other point was raised on behalf of the Corporation.

In the facts and circumstances no infirmity is discerned in the impugned order, insofar as, it directed payment of balance gratuity under the provisions of the Act. Therefore, I find no merit in the writ petition and the same is consequently dismissed but without order as to costs.