The Commissioner Municipality vs The Appellate Authority under the Payment of Gratuity Act and Joint Commissioner of Labour and Others

K. Chandru, J.—The Petitioner is the Erode Municipality, represented by its Commissioner. They filed these 5 writ petitions, challenging the order of the Appellate Authority under the Payment of Gratuity Act, inP.G.A. Nos. 14 to 18 of 2000 and P.G.A. Nos. 22 to 26 of2000. The Appellate Authority, namely, the first Respondent by his common order dated 21.01.2002 confirmed the order of the second Respondent Controlling Authority made in various gratuity applications.

The writ petitions were admitted on 23.06.2005. Pending the writ petitions, this Court granted an interim stay on the finding that the entire amount as awarded a rein deposit with the second Respondent.

The only contention raised by the Petitioner Municipality was that since the contesting Respondents(R3) have been paid pension and DCRG, they are not eligible for any further amount separately as gratuity. Both the authorities R1 and R2 have committed error in computing the gratuity.

The grounds raised by the Petitioner in these writ petitions are no longer res integral. It is an admitted case that the Petitioner Municipality do not enjoy any exemption u/s 5 of the Act and me repayment of pension and DCRG will not take away the right of the employee to receive gratuity.

It is necessary to refer to Section 14 of the Payment of Gratuity Act, which is as follows:

Act to override other enactments, etc.-The provisions of this Act or any rule made there under shall have effect not with standing anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.

The Supreme Court in Katheeja Bai Vs. Superintending Engineer and Others, rejected a similar contention when the employer attempted to state that a Special Contribution of PF would be equated to pension and therefore, there was no necessity to pay gratuity. In paragraph 7, it was observed as follows:

Dr Chitale invited our attention to Section 14 of the Payment of Gratuity Act, 1972 which provides, "The provisions of this Act or any rule made there under shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.

He argued that the provision for Special Contribution under Regulation37 was inconsistent with the provisions of the Payment of Gratuity Act and therefore the latter should prevail to the exclusion of the former. This argument is dependent on the assumption that the Special Contribution under Regulation 37 is the same thing as the gratuity contemplated by the Payment of Gratuity Act. We have held that it is not and the argument, therefore, fails.

Very recently, the Supreme Court in Allahabad Bank and Another Vs. All India Allahabad Bank Retired Emps. Assn., , had rejected a similar contention. In Paragraph 36 and 38, it was observed as follows:

The Appellant being an establishment is under the statutory obligation to pay gratuity as provided for u/s 4 of the Act which is required to be read along with Section 14 of the Act which says that the provisions of the Act shall have effect notwithstanding anything inconsistent therein contained in any enactment or in any instrument or contract having effect by virtue of any enactment other than this Act. The provisions of the Act prevail over all other enactments or instruments or contracts so far as the payment of gratuity is concerned. The right to receive gratuity under the provisions of the Act cannot be defeated by any instrument or contract.

There is no material placed before us that the employees while opting for the pension scheme at the time of their superannuation/retirement either expressly or impliedly waived their statutory right to claim payment of gratuity under the provisions of the Act. In the circumstances we find no merit in the submission made by the learned Counsel for the Appellant in this regard. For the aforesaid reasons we find no merit in the appeal. 2010 2SCC had rejected a similar contention.

In the light of the above, all the writ petition will stand dismissed. No costs. Consequently, connected miscellaneous petitions are closed. In view of the dismissal of the writ petitions, there is no impediment for the third Respondent in all the writ petitions to withdraw the amount lying in deposit with the second Respondent.