Rajkot Municipal Corporation vs Aniruddh Fulshankar Shukla

R.M. Doshit, J.—Heard learned advocates for the respective parties.

These petitions involve a common issue and with the consent of the learned Advocates for the respective parties, are disposed of by this

common order.

The petitioner in all these petitions is the Rajkot Municipal Corporation. These petitions are preferred against the orders of the Controlling

Authority made under the Payment of Gratuity Act, 1972 (hereinafter referred to as ""the Act"") and confirmed by the appellate authority. The

concerned respondents are the former employees of the Corporation and have retired from service as such. The respondents had approached the

Controlling Authority under the Act and had claimed a right to receive gratuity under the Act. The Controlling Authority under the respective

orders directed the Corporation to make payment of gratuity to the concerned employees as provided under the Act. Said orders were challenged

before the appellate authority and were confirmed. Therefore, these petitions.

Mr. Gadhia has contended that on 19-8-1988 the Corporation had passed a resolution and had introduced a pension scheme for the benefit of

its employees. Under the said resolution the employees of the Corporation can have an option either to join the pension scheme and to receive

gratuity in accordance with the Government Resolution or to receive gratuity under the Act. It was specifically provided that those who opted for

pension scheme shall be entitled to death-cum-retirement gratuity in accordance with the relevant Government Scheme. It is contended that all the

respondents herein had at the relevant time opted for the pension scheme and accordingly they were entitled to death-cum-retirement gratuity in

consonance with the relevant Government resolution and were accordingly paid the amount of death-cum-retirement gratuity and are also receiving

pension regularly. The claim for gratuity under the Act is, therefore, contested on the ground that these respondents are not entitled to the gratuity

under the Act.

The Honourable Supreme Court in the matter of Municipal Corporation of Delhi v. Dharam Prakash Sharma 1998 II CLR 574 S.C., 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 cannot be accepted. It is

not disputed that the Corporation has not applied for exemption u/s 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.

For the reasons recorded hereinabove, 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.

Subject to the above observations these petitions are summarily rejected. Notice issued in each of the petitions is discharged.