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TMI Blog2008 (2) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the validity of the instructions issued by the Chairman of the appellant- Corporation, the Karnakata High Court took a different view. 4. The claim of Respondent No.1 was allowed in part by a learned Single Judge of the High Court by his order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof 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, 1956, with the previous approval of the Central Government, made Regulations known as "Life Insurance Corporation of India (Staff) Regulations, 1960 (in short 'the Regulations'). Chapter IV of the said Regulations deal with "Pay and Allowances". Regulation 51 thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsioners 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 the aforementioned Rule clearly shows that for the purpose of computation either 1/4th of the emoluments for each completed six-monthly period of service, or 3/16th of emoluments for each completed six-monthly period of service, is to be taken into consideration. Such emoluments necessarily were pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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' and 'city compensatory allowance' are envisaged by IInd Schedule appended to the said Regulations, the other allowances, and for instance, the 'Provident Fund' and 'Gratuity' have nothing to do therewith. Provident Fund and Gratuity are ordinarily governed by the Acts enacted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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 both necessary and proper for the carrying into execution of the main power which has been expressly conferred. (Dunichand and Co. vs. Narain Das and Co. (1947) 17 Comp. Cas. 195 (FB)." 24. Each word employed in a statute must take colour from the purport and object for which it is used. The principle of purposive interpretation, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, 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 the four-corners of the statute. The power of a sub-delegatee is more restricted. A delegatee cannot act in violation of a statute. A sub-delegatee cannot exercise any power which is not meant to be conferred upon him by reason of statutory provisions. It must conform not only to the provisions of the Regulations and the Act but also other Parlia ..... 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