TMI Blog2008 (2) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in Writ Appeal No. 32 of 2004. 2. We may notice only the admitted facts herein. Respondent No.1 is an Association of officers who have retired from the services of the appellant-Corporation which is a statutory authority constituted and incorporated under the Life Insurance Corporation Act, 1956. During the period of 1st August, 1992 and 31st July, 1994 a revision of scales of pay of the offices and employees of the Corporation took place. Different cut off dates were fixed for grant of different nature of allowances as also pay by the Chairman of the Corporation in purported exercise of his power under Regulation 51 of the Regulations. Whereas 1st April, 1993 was the cut off date for revision of pay; 1st August, 1994 was fixed as the cut off date for the purpose of payment of gratuity on the basis of revised pay. However, so far as those employees who had retired prior to 1st August, 1994 are concerned, they were directed to be entitled to reduce gratuity based on the reduced scale of pay with effect from 1st April, 1993 only. The arrears of pay were directed to be paid only w.e.f. 1st April, 1993. 3. Indisputably, whereas the Gujarat and Kerala High Court upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 51 being of wide amplitude, the jurisdiction of the Chairman to fix cut off dates was not only applicable in respect of pay and allowances covered by Schedule II of the Regulations but also included gratuity as envisaged under Regulation 77, as the quantum thereof has a direct nexus with the payment of salary. iii) An employer, subject to the applicability of the doctrine of reasonableness and non-arbitrariness, can fix a cut off date for the implementation of the revised pay and allowances. iv) The amount of gratuity payable has to be calculated upon the permanent pay and once the gratuity has been paid, no further amount is payable only because the salary has been revised. 7. Mr. P.S. Narasimha, learned counsel appearing on behalf of the respondents, on the other hand, contended that the power of the Chairman of the Corporation to issue instructions being limited to Chapter IV of the Regulations, it has no application in relation to the payment of gratuity as provided for in Regulation 77 thereof. 8. Appellant-Corporation in exercise of its powers conferred upon it by clauses (b) and (bb) of sub-section (2) of Section 49 of the Life Insurance Corporation Act, 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal with all of them. 12. We may, however, note some precedents operating in the field. Recently in H.E.C. Voluntary Retired Employees Welfare Society and another vs Heavy Engineering Corporation Ltd. and others : (2006) 3 SCC 708 this Court observed :- 24. In State of A.P. v. A.P. Pensioners Assn. this Court categorically held that the financial implication is a relevant criterion for the State Government to determine as to what benefits can be granted pursuant to or in furtherance of the recommendations of a Pay Revision Committee. A' fortiori while taking that factor into account, an employer indisputably would also take into consideration the number of employees to whom such benefit can be extended. {See also U.P. Rahavendra Acharya and others vs. State of Karnatka and others [(2006) 9 SCC 630]} 13. It is also interesting to notice a decision of this Court in State of Andhra Pradesh and another vs. A.P. Pensioners' Association and others : (2005) 13 SCC 161 wherein it was opined :- 28. Computation of retirement gratuity payable to a government servant is, therefore, required to be done on the basis of the formula laid down therein. A bare perusal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are subordinate legislation. Chairman of the Corporation is a statutory authority. Power to fix a cut off date has been conferred upon him by way of statutory provision. The same requires a strict interpretation. Chapter IV of Regulations envisages scales of pay. It also talks of dearness allowance and other allowances as envisaged under the IInd Schedule thereof. Clause (2) of the said Regulation, as indicated hereinbefore, confers jurisdiction on the Chairman of the Corporation to regulate the same as also other matters connected therewith or incidental thereof by issuance of instructions. 15. It may be true, as was contended by Mr. Patwalia, that the cut off dates were fixed upon holding negotiations with the Unions. However, the jurisdiction of the Chairman to fix a cut off date is in question in terms of sub-regulation (2) of Regulation 51. Instructions have been issued under the said provision alone. Instructions not only cover the scales of pay from a particular date but different dates have been fixed for different types of allowances. We have noticed hereinbefore that whereas dearness allowance and some other allowances, as for instance 'house rent allowance&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Regulations. It cannot be permitted to encroach upon an area which is not within the jurisdiction of the Chairman of the Corporation. 22. It is one thing to say that the court while exercising its jurisdiction would be entitled to exercise such incidental power for determination of the principal issue but it is another thing to say that a statutory authority in such matters would be held to have such power which is beyond the scope and purport of the principal provisions. 23 The word Incidental has been defined in Advanced Law Lexicon 3rd (2005) Edition, Book 2 at 2275 to mean :- According to Stroud's Judicial Dictionary, a thing is said to be incidental to another when it appertains to the principal thing. According to the ordinary Dictionary meaning, it signifies a subordinate action. Hukumchand Jute Mills Ltd. vs. Labour Appellate Tribunal, AIR 1958 Cal. 68, 70. (Industrial Disputes Act (14 of 1917), S. 10(4)]. The word incidental does not imply any casual or fortuitous connection. In a legal sense as applied to powers, it means a power which is subsidiary to that which has been expressed, and of an instrumental nature in relation thereto, which is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides for a rule of measurement. An employee, as noticed hereinbefore, was entitled to pension provided he has completed the specified period of service. How such a period of service would be computed is a matter which is governed by the statute. It is one thing to say that a statute provides for completion of fifteen years of minimum service, but if a provision provides for measurement of the period, the same cannot be lost sight of. Provision of the Regulations which are beneficial in nature, in our opinion, should be construed liberally. 28. Contention of Mr. Patwalia that the Chairman of the Corporation having power even to fix the cut off dates for different purposes, the jurisdiction exercised by him to do so for payment of gratuity, which has a direct nexus with the revised pay of scale cannot be accepted. Once he fixes a cut off date for the purpose of giving effect to the agreement vis-`-vis the payment of arrears in terms thereof, he cannot exercise further jurisdiction in respect of a matter which is not controlled by Chapter IV but is controlled by other provisions of statutes and Parliament Acts governing the field. A delegatee must exercise its powers within th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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